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43. Which of the following would NOT be included in the amount deemed to be At...

43. Which of the following would NOT be included in the amount deemed to be At Risk?

A. Cash and adjusted basis of property.

B. Recourse debt.

C. Nonrecourse debt.

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Answer #1

Answer: Option B) Recourse debt.

Explanation:

At risk is the cumulative result of tax-payers, The rules applicable only certain defined types of activities, but subsequent amendments expanded their scope to cover all trades or businesses. The at-risk rules apply to individuals like sole traders and closely held C corporations.

The at-risk rules applied to cash and adjusted basis of property which are related to the business other than properties not included.

The at-risk rule not applied for recourse debt, the liabilities which are related part of the partners can eligible other than liabilities or debts not included.

The non recourse debt borrowings in connection with holding real property if no person is liable for repayment (qualified non recourse debts).

Thus, Option B) is correct and remaining options are incorrect.

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