Complete the statements below regarding why some rental activities may not be treated as such under the passive activity loss rules. Some rental activities are not treated as such for purposes of the passive activity loss rules. One exception is when property is rented for days or less. This exception is based on the presumption that a person who rents property for this period is generally to provide significant services to the customer. The fact that a business is not treated as a rental activity due to the required exception does not necessarily mean that it is classified as a nonpassive activity. Therefore, if the taxpayer is a material participant, ; ir he is not a material participant, it is treated as a passive the business is treated as active activity.

Complete the statements below regarding why some rental activities may not be treated as such under the passive activity loss rules. Some rental activities are not treated as such for purposes of the passive activity loss rules. One exception is when property is rented for days or less. This exception is based on the presumption that a person who rents property for this period is generally to provide significant services to the customer. The fact that a business is not treated as a rental activity due to the required exception does not necessarily mean that it is classified as a nonpassive activity. Therefore, if the taxpayer is a material participant, ; ir he is not a material participant, it is treated as a passive the business is treated as active activity.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Which of these is not typically a responsibility of a property manager? O Maintenance programs Marketing and leasing O Tenant relations O Income tax analysis
Which of the following would be considered reasons for mortgage fraud? Select all that apply. Responses overstated your income overstated your income understated your debts understated your debts lied about apartment rental lied about apartment rental lied about employment lied about employment
Which of the following factors cannot be used to determine an insurer's limit of liability on property coverage? O A. Actual cash value Replacement cost Salvage value Policy limits OB. O C. D. Whiteboard
FHA-insured loans insure lenders against a. decline in real estate values. b. loss due to foreclosure. . loss due to borrowers losing their jobs, d. late payments by borrowers.
It would be the owner's responsibility in the management agreement to: Require the manager to keep insurance on the property Require the owner to carry insurance on the property Require the tenants to carry insurance on the property Make all parties carry indemnity insurance
How can bookkeepers and accountants steal from a property, and what steps can be taken toprevent it?
Sometimes, for the fixed assets of certain businesses, the balance in Accumulated Depreciation is equal to the cost of the asset. a. Can one record additional depreciation on the assets if the assets are still useful to the business? b. Why? Explain: c. Also, when can such a business make an entry to remove the cost and accumulated depreciation of the fixed assets from the account?
Which of the following statements is/are correct? 1. Depreciation represents the loss in market value of an asset. II. The statement of financial position is likely to do a better job at capturing the assets/resources of a retailer (such as a supermarket) than a professional services firm (such as a law firm or professional accountancy firm). III. All tangible non-current assets go through the process of depreciation. IV. The following will have a negative impact on profitability in a given year: (a) increasing the allowance for trade receivables on the balance sheet, (b) reducing the useful life of depreciable non-current assets, (c) writing down closing inventory. a. Another combination of statements not shown among the other answers. b. All of the statements are correct. c. (II) and (IV) d. (I) and (III) e. (I), (II) and (III) f. (I), (III) and (IV)
An increase in interest income recognized for the period on a lease agreement will have the effect of reducing the unearned revenue account for the lessor. Select one: True False
What is lease rent and lease income? Do I have to record initial direct costs when I record payment? Do I need to derecognize the asset?
5. Which of the following remedies available to the seller for the breach of contract of sale committed by the buyer is correct? Group of answer choices Assuming the goods have already been delivered to the buyer and the buyer wrongfully neglects or refuses to pay the price, the seller may maintain an action for the price of the goods or may file an action to collect a sum of money. If the buyer wrongfully neglects or refuses to accept and pay for the goods, the seller may maintain an action for damages. Assuming the goods have not yet been delivered to the buyer and (1) If the buyer has repudiated the sale or (2) If the buyer manifested his inability to perform his obligation to pay the price or (3) If the buyer has committed a breach of contract, the seller may rescind the contract of sale. All of the other choices.
A title insurance policy: 1) 2) 3) Protects against a recorded easement overlooked in a title search. 2) Provides no protection for prescriptive easements. Under a race statute: 3) Protects against zoning issues. 1) The first purchaser to record wins title. The first bona fide purchaser to record wins title. The last bona fide purchaser takes title.