1. In your “own” words. delight depict what a “Suspended Loss” is. how it is generated and when it is becomes deductible. ( 5 platinums ) A suspended loss is a capital loss that is suspended until future old ages because it exceeds inactive income restrictions for the current twelvemonth. They are generated if a loss occurs for an activity one twelvemonth. the loss exceeds inactive income restrictions and can non be claimed in that twelvemonth. the taxpayer continues the activity the undermentioned twelvemonth ( s ) . They are deductible when there is sufficient inactive income.
2. Please describe “Active Participation” as it relates to a taxpayer’s engagement in an investing in Real Estate. ( 5 platinums ) . An active participant is one that may non be regular. uninterrupted or significant. They make some managerial determinations and must keep an involvement of 10 % or more in the belongings at all times during the twelvemonth. These participants may subtract up to a $ 25. 000 loss for non-passive income.
3. Macy had a batch of medical disbursals this twelvemonth that were non covered by her insurance ( either due to a deductible. co-insurance. or co-pay ) . Her un-reimbursed modification medical disbursals entire $ 8. 356 and her AGI for 2013 is $ 45. 000. Assuming she will enumerate on her 2013 revenue enhancement return. how much of her medical disbursals will she be able to subtract? ( 5 platinums ) Medical Expenses $ 8. 356
Less 10 % of $ 45. 000 ( AGI ) 4. 500
Entire Medical Expense Deduction $ 3. 856
4. Heather & A ; Terry have a mortgage on their primary abode of $ 750. 000 and a mortgage on their holiday place of $ 410. 000. In 2013. they incurred $ 46. 400 of mortgage involvement disbursal. How much. if any. of that involvement is deductible on Agenda A? ( 5 platinums )
The IRS has taken the place that if the initial mortgage exceeds $ 1. 000. 000. up to $ 100. 000 of the surplus will measure up as place equity involvement. Rev. Rul. 2010-25 Combined Mortgage $ 1. 160. 000
Mortgage Interest Expense 46. 400
Allowable Indebtedness 1. 100. 000
Allowable Deduction $ 44. 000
( 1. 100. 000/1. 160. 000 ) *46. 400