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juin [17]
4 years ago
6

Gray Company, a closely held C corporation, incurs a $50,000 loss on a passive activity during the year. The company has active

income of $34,000 and portfolio income of $24,000. If Gray is not a personal service corporation, it may deduct $34,000 of the passive activity loss.
a. true.
b. false.
Business
1 answer:
-Dominant- [34]4 years ago
6 0

Answer:

B) False: since it is still a closely held C corporation, it cannot reduce its ordinary income through passive losses. If it hadn't been a closely held C corporation then it could have made the deductions.

Explanation:

Passive losses are losses resulting from financial activities, i.e. investments in other corporations where the investor doesn't participate in.

Passive losses cannot offset ordinary income, they must be matched against passive gains only. If passive losses exceed passive gains, they can be carried forward without limitation.

The only exception applies to C corporations that are not;

  • closely held corporations or
  • personal service corporations.

Qualifying C corporations can actually deduct passive losses from certain ordinary income.  

Closely held C Corporations are corporations where during the last 6 months, 50% or more of its stock is owned by 5 or fewer investors.

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Which of the following correctly explains the crowding-out effect?
Zina [86]

Answer:

DK

Explanation:

7 0
3 years ago
In a _______________________, most economic decisions about what to produce, how to produce it, and for whom to produce it are m
olchik [2.2K]

Answer:

The correct answer is: market-oriented economy.

Explanation:

The market economy is an economic system where the fundamental decisions of what, how and for whom to produce are resolved through the market.

In a market economy, the interaction of supply and demand is what determines the quantity and equilibrium price of goods and services traded. Also, the market is responsible for the distribution of income through the possession of productive factors (capital, labor, etc.) .

The State, for its part, would have the role of providing a legal framework that allows free competition and initiative of companies. This includes the protection of property rights, the intermediation of conflicts (Courts) and the subsidiary action in those cases in which competition is not feasible or limited.

5 0
3 years ago
You want to buy a new sports car from Muscle Motors for $57,500. The contract is in the form of a 60-month annuity due at an APR
Taya2010 [7]

Answer:

Present value (PV) = $57,500

Interest rate (APR) = 5.9%

Number of years = 5 years

Number of installments in a year (m) = 12        

Monthly payments (A) = ?                              

PV = A<u>(1 - (1 + r/m)-nm</u>)

                r/m

$57,500 =  A<u>(1  - (1 + 0.059/12)</u>-5x12

                          0.059/12

$57,500 = A<u>(1 - (1 + 0.004916666667)</u>-60

                       0.004916666667

$57,500 = A<u>(1 - (1.004916666667)</u>-60

                       0.004916666667  

$57,500 = A<u>(1 - 0.745069959)</u>

                     0.004916666667

$57,500 = A(51.85017778)

<u>$57,500  </u>       = A

51.85017778

A = $1,108.96 per month

                               

Explanation:

In this case, we need to apply the formula for present value of an ordinary annuity on the assumption that payment is made on monthly basis. The present value, interest rate (APR), number of years and number of installments in a year were provided in the question with the exception of monthly payment. Thus, the monthly payment becomes the subject of the formula.                                                                                                                                                                                                                                                                                                                                                                                                            

6 0
3 years ago
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shutvik [7]

Answer:

Learning-Level

Explanation:

The correct answer to this question is Learning - Level.

To qualify as a tax preparer one must learn how to calculate tax and provide tax preparation. Learning level is the intelligence of a person which is important to learn new things, more intelligence will provide with fast learning. E-Learning is the system of learning with the help of electronic devices.

8 0
3 years ago
Read 2 more answers
Suppose the price index was 105 in 2017, 126 in 2018, and the inflation rate was lower between 2018 and 2019 than it was between
Naily [24]

Answer:

These are the answers to the question:

a. the price index in 2019 was lower than 126.0.

b. the price index in 2019 was lower than 147.0.

c. the price index in 2019 was lower than 151.2.

d. the inflation rate between 2018 and 2019 was lower than 1.2 percent.

And this is the correct answer:

b. the price index in 2019 was lower than 147.0.

Explanation:

We can see that the price index rose by 21 units from 105 in 2017 to 126 in 2018.

If the inflation rate was lower between 2018 and 2019, it means that the price index rose by less than 21 units during this period.

Because 126 + 21 = 147, we can be certain that the price index in 2019 was lower than 147.

7 0
3 years ago
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