1. Andrew, who is single, has $95,000 of salary, $60,000 of income from a limited partnership, and a $79,000 passive loss from a real estate rental activity in which he actively participates. His modified adjusted gross income is $95,000. Of the $79,000 loss, how much is deductible?
a. $-0-.
b. $19,000.
c. $25,000.
d. $79,000.
e. None of the above.
2. Paul owns five activities. He elects not to group them together as a single activity under the "appropriate economic unit" standard. He participates for 100 hours in Activity A, 145 hours in Activity B, 125 hours in Activity C, 105 hours in Activity D, and 126 hours in Activity E. Which of the following statements is correct?
a. Activities A, B, C, and E are all significant participation activities.
b. Paul is a material participant with respect to Activities B, C, D, and E only.
c. Paul is a material participant with respect to Activities A, B, C, D, and E.
d. Activities A, B, C, D and E are all significant participation activities.
e. None of the above.