Anisa owns a rental house that generated a ($11,000) loss this year. Anisa does not meet the standards for material participation but does meet the standards for active participation. Anisa has a salary of $70,000 and $4,000 in dividend

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 2BCRQ
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Anisa owns a rental house that generated a ($11,000) loss this year. Anisa does not meet the
standards for material participation but does meet the standards for active participation. Anisa
has a salary of $70,000 and $4,000 in dividend income. How is the ($11,000) rental real estate
loss treated on Anisa’s current year tax return?
a. The full ($11,000) loss is deductible.
b. Anisa can deduct only ($4,000) of the loss, to offset her dividend income .
c. The rental loss is not deductible this year because Anisa does not have any passive
income.
d. The rental loss is not deductible this year because Anisa’s income is too high

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