Question: Alexis has three passive activities with at-risk amounts in excess of $100,000 for each. During the year, the activities produced following income (losses). Activity A Activity B Activity C $(25,000) (15,000) 25,000 Net passive loss $(15,000) Alexis's suspended losses are as follows: a. $15,000 is allocated to C; $0 to A and B b. $7,500 is allocated to A; $7,500 to B c. $15,625 is allocated to A; $9,375 to B d. $5,000 is allocated to A, B, and C

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Question:
Alexis has three passive activities with at-risk amounts in
excess of $100,000 for each. During the year, the activities
produced following income (losses).
Activity A
Activity B
Activity C
$(25,000)
(15,000)
25,000
Net passive loss $(15,000)
Alexis's suspended losses are as follows:
a. $15,000 is allocated to C; $0 to A and B
b. $7,500 is allocated to A; $7,500 to B
c. $15,625 is allocated to A; $9,375 to B
d. $5,000 is allocated to A, B, and C
Transcribed Image Text:Question: Alexis has three passive activities with at-risk amounts in excess of $100,000 for each. During the year, the activities produced following income (losses). Activity A Activity B Activity C $(25,000) (15,000) 25,000 Net passive loss $(15,000) Alexis's suspended losses are as follows: a. $15,000 is allocated to C; $0 to A and B b. $7,500 is allocated to A; $7,500 to B c. $15,625 is allocated to A; $9,375 to B d. $5,000 is allocated to A, B, and C
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