Asked by Diego Dulanto on Jun 26, 2024
Verified
Which of the following decreases a taxpayer's at-risk amount?
A) Cash distributions.
B) Increases in liabilities.
C) Income items.
D) Cash contributions.
At-Risk Amount
The maximum amount of money or other assets that a taxpayer can claim as a deduction or loss from an activity, to the extent of the actual economic risk.
- Become familiar with how at-risk rules are important in establishing which losses can be deducted.
Verified Answer
GD
Glauber De CastroJun 28, 2024
Final Answer :
A
Explanation :
Cash distributions decrease a taxpayer's at-risk amount because they reduce the actual economic stake or investment the taxpayer has in the activity.
Learning Objectives
- Become familiar with how at-risk rules are important in establishing which losses can be deducted.
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