(LO.1, 3 Federal Taxation) A number of years ago, Kay acquired an interest in a partnership in which she is not a material participant. Kay’s basis in her partnership interest at the beginning of 2019 is $40,000. Kay’s share of the partnership loss is $35,000 in 2019, and her share of the partnership income is $15,000 in 2020.  How much may Kay deduct in 2019 and 2020, assuming that she owns no other passive activities.

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Fringe Benefit Tax

Fringe benefits are in addition to the compensation that companies give to their employees. It is an additional benefit above the stated salary. It helps to keep the employees of the firm motivated as sometimes the only salary is not enough to retain the quality employees of the firm. There are different types of fringe benefits. Fringe benefits are given in both private as well as public enterprises.