Question

Ida, who has AGI of $80,000 before considering rental activities, is active in three separate real estate rental activities. Ida has a marginal tax rate of 22%. She has $12,000 of losses from Activity A, $18,000 of losses from Activity B, and income of $10,000 from Activity C. She also has $2,100 of tax credits from Activity A. Calculate the deductions and credits that she is allowed and the suspended losses and credits.

Answer 1

Answer:

Leasing or renting a property is aloof source of income. So misfortunes or losses brought about from passive exercises can be deducted from gain acknowledged from passive exercises.

In given case Ida has caused loss of complete $ 30,000($18,000 +$12,000) from leasing activities against income of $ 10,000 .

Right now can set loss of $ 10,000 to pick up or gain of $10000.

So all out or total deduction is $10,000.

Tax credit would be most extreme upto $ 5000 or $10000 relying upon filling status as single or MFJ.

So, all out tax credit would be $ 2,000

Remaining misfortune or loss can be conveyed forward by ida.