Instructions:

Problem 5 Roberta gave her daughter a passive activity last year that had an adjusted basis of $37,500. The activity had suspended losses of $17,500 and a fair market value of $60,000. In the current year, her daughter realized an income of $9,000 from the passive activity. What is the tax effect on Roberta and her daughter last year and in the current year? Problem 6 Charles had the following itemized deductions in 2018: State income taxes $3,000 Charitable contributions 4,900 Mortgage interest (personal residence) 14,000 Medical expenses [58,000-(7.5% $75,000)] 2,375 a. What are Charles' itemized deductions for AMT purposes? b. What is the amount of the AMT adjustment? O Calculate the initial basis, allowed losses, and ending at-risk amounts. Explain how to treat a loss on a federal income tax return. Calculate what can be deducted on a final income tax return. o Calculate the loss disallowed by at-risk rules and how much of the loss is disallowed by passive loss rules Explain the tax effect in a specified scenario for the last year and the current year. Calculate itemized deductions for AMT purposes and identify the amount of the AMT adjustment