What amount of the rental losses may smith deduct

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1. A review of Bradley's Year 2 records disclosed the following tax information.

Wages                                                              $18,000

Taxable interest and qualifying dividends             4,000

Schedule C trucking business net income             32,000

Rental (loss) from residential property                 (35,000)

Limited partnership (loss)                                   (5,000)

Bradley actively participated in the rental property and was a limited partner in the partnership. Bradley had sufficient amounts at risk for the rental property and the partnership. What is Bradley's Year 2 adjusted gross income?

2. Smith has an adjusted gross income (AGI) of $120,000 without taking into consideration $40,000 of losses from rental real estate activities. Smith actively participates in the rental real estate activities. What amount of the rental losses may Smith deduct in determining taxable income?

Reference no: EM131622561

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