Exam 13: At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

If a limited partner materially participates in the trade or business of a limited partnership,the passive loss rules still apply.

Adjustments to AMTI can be either positive or negative.

What form must a taxpayer file if he or she is at-risk in an activity?

For AMT purposes,the standard deduction and personal exemptions are:

How much,in rental losses,can an individual earning a salary of $125,000 per year offset against salary if he or she owns at least 10% of a rental activity and actively participates in the rental activity?

In 2014,Nigel contributes cash of $10,000 in exchange for a 20% interest in the NDP Partnership.The partnership is not a passive activity.For 2014,the partnership had an ordinary loss of $80,000,interest income of $2,000,dividends of $5,000,and capital gains of $4,000.How much of the current year loss is deductible by Nigel and what is Nigel's at-risk amount on December 31,2014?

In 2012,Mary invested $200,000 in a business that is not a passive activity.During 2013,her share of the business loss is $140,000.In 2014,her share of the business loss is $100,000.How much can Mary deduct in 2013 and 2014?

Terence and Alfred each invested $10,000 cash in T&A General Partnership and each received a 50% interest in the partnership.The partnership borrowed $100,000 in full recourse debt. a.Assume that the $100,000 was borrowed from a bank.What are the amounts Terence and Alfred have at-risk with respect to their partnership interests? b.Assume that the $100,000 was borrowed from Alfred.What are the amounts Terence and Alfred have at-risk with respect to their partnership interests?

Which of the following decreases a taxpayer's at-risk amount?

Jordan purchased a warehouse for $600,000.$100,000 of the cost was properly allocated to the land. a.If the property was purchased in April of 1998,what is the AMT depreciation adjustment required in 2014? b.If the property was purchased in April of 2014,what is the AMT depreciation adjustment required in 2014?

Two equal partners involved in a passive activity with identical passive losses from that activity may be allowed to deduct different amounts of the losses on their own tax returns.

Jacob is single with no dependents.During 2014,Jacob has $110,000 of taxable income.He has $38,000 of positive AMT adjustments and $22,000 of tax preferences.Jacob does not itemize his deductions but takes the standard deduction.Calculate Jacob's AMTI.

Bailey owns a 20% interest in a partnership (not involved in real estate)in which his at-risk amount was $25,000 at the beginning of the year.During the year,Bailey receives a distribution of $20,000 from the partnership.The partnership produces an $80,000 loss during the year.If you ignore the passive loss rules,Bailey's deductible loss for the year is:

Generally,the gains and losses recognized for regular tax purposes are the same amount as the gains and losses recognized for AMT purposes.

Tax preference items for AMT:

Paul invests $10,000 cash in an equipment leasing activity for a 15% ownership share in the business.The remaining 85% owner is Amanda.Amanda contributes $10,000 and personally borrows $75,000 that she also invests in the business.What are the at-risk amounts for Paul and Amanda?

The standard deduction is added back as a positive adjustment to AMTI.

Cory sells his entire interest in a rental property in which he actively participated at a gain of $12,000.The activity has a current year loss of $4,800 and $16,000 in prior year suspended losses.During the year,Cory has $80,000 in salary.What is Cory's AGI for the year?

The general rule concerning passive losses is that passive activity losses can only be deducted to the extent of passive and portfolio income.

If a loss is disallowed under passive loss rules,the loss is: