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

The passive activity loss rules require income/loss items to be separated into two categories: active income/loss and passive income/loss.

Denise's AGI is $145,000 before considering her single rental property.During the year,Denise had a rental loss of $13,000.What is Denise's AGI after considering the rental loss?

Antonio reported the following itemized deductions on his 2014 tax return.His AGI for 2014 was $95,000.The mortgage interest is all qualified mortgage interest to purchase his personal residence.For AMT,compute his total adjustment for itemized deductions.

A loss must first be allowed under the passive activity loss rules and then must pass through the at-risk rules in order to ultimately be deducted on the tax return.

Which of the following is a passive activity?

Claudia invested $50,000 cash in the C&S General Partnership and received a 20% interest.The partnership borrowed $200,000 of full recourse debt from a local bank.Assuming that Claudia is personally liable for $40,000 if the partnership defaults on the loan,what is Claudia's at-risk amount before considering any partnership income or loss?

To be considered a material participant in an activity,a taxpayer must meet all of the seven tests prescribed in the regulations.

After computing all tax preferences and AMT adjustments,Peter has AMTI of $210,000 in 2014.If Peter is single,what exemption amount can he claim for AMT in 2014?

Sarah is single with no dependents.During 2014,Sarah has $86,000 of taxable income.She has $14,000 of positive AMT adjustments and $24,000 of tax preferences.Sarah does not itemize her deductions but takes the standard deduction.Calculate Sarah's AMTI.

AMT depreciation of personal property is calculated using which method?

The Tara Partnership (not involved in real estate)generated income of $75,000 during the year.Since the partnership is involved in an activity that is subject to the at-risk rules,all of Tara's partners must file Form 6198 with their individual income tax returns.

In 2010,Lindsay's at-risk amount was $50,000 at the beginning of the year.Lindsay's shares of income and losses from the activity were as follows (ignore passive loss rules): In 2014,what amount of income or loss will Lindsay report from this activity?