Question

Lydia is a 10 percent owner in Canine Connection, LLC, a day-care center for dogs. She is also a 15 percent owner in Little Laughter, LLC, a successful children’s clothing store. She does not materially participate in either business. Her at-risk and loss/income for the current year is as follows: • Canine Connection - At-risk = $175,000; Loss of $275,000 • Little Laughter - At-risk = $25,000; Income of $125,000 Lydia also has wage income of $80,000 and capital gain income of $30,000. Which of the following statements is true? Group of answer choices The loss suspended because of the at-risk rules is $75,000 and the loss suspended because of the passive activity loss rules is $75,000. The loss suspended because of the at-risk rules is $75,000 and the loss suspended because of the passive activity loss rules is $0. The loss suspended because of the at-risk rules is $50,000 and the loss suspended because of the passive activity loss rules is $100,000. The loss suspended because of the at-risk rules is $100,000 and the loss suspended because of the passive activity loss rules is $50,000.

          Lydia is a 10 percent owner in Canine Connection, LLC, a day-care center for dogs. She is also a 15 percent owner in Little Laughter, LLC, a successful children’s clothing store. She does not materially participate in either business. Her at-risk and loss/income for the current year is as follows: • Canine Connection - At-risk = $175,000; Loss of $275,000 • Little Laughter - At-risk = $25,000; Income of $125,000 Lydia also has wage income of $80,000 and capital gain income of $30,000. Which of the following statements is true?
Group of answer choices
The loss suspended because of the at-risk rules is $75,000 and the loss suspended because of the passive activity loss rules is $75,000.
The loss suspended because of the at-risk rules is $75,000 and the loss suspended because of the passive activity loss rules is $0.
The loss suspended because of the at-risk rules is $50,000 and the loss suspended because of the passive activity loss rules is $100,000.
The loss suspended because of the at-risk rules is $100,000 and the loss suspended because of the passive activity loss rules is $50,000.

Added by Christy L.

Question

Please give Ace some feedback