Simon (a single taxpayer) works as a professional model and earned $333,000 from his modeling work...

  

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Simon (a single taxpayer) works as a professional model and earned $333,000 from his modeling work this year. In addition, he owns and operates two unrelated business activities. In the current year, Business A earned $170,000 of profit. Business B incurred a loss of $(395,000). Ignoring any possible basis limitation and potential Section 199A deduction, how much of Simon's $395,000) Business B loss will he be able to deduct in the current year? Three years ago, Sara Phillips sold land with a $300,000 basis to Warsham Inc. for $117,000 cash. In the current year, Warsham sold the same land to an unrelated buyer for $267,000. If Sara owns 68 percent of Warsham's outstanding stock, what is Warsham's book-tax difference related to the current-year sale? Simon (a single taxpayer) works as a professional model and earned $333,000 from his modeling work this year. In addition, he owns and operates two unrelated business activities. In the current year, Business A earned $170,000 of profit. Business B incurred a loss of $(395,000). Ignoring any possible basis limitation and potential Section 199A deduction, how much of Simon's $395,000) Business B loss will he be able to deduct in the current year? Three years ago, Sara Phillips sold land with a $300,000 basis to Warsham Inc. for $117,000 cash. In the current year, Warsham sold the same land to an unrelated buyer for $267,000. If Sara owns 68 percent of Warsham's outstanding stock, what is Warsham's book-tax difference related to the current-year sale?

Answer rating: 100% (QA)

Assuming that Simon materially participates in both Business A and Business B he can deduct up to the full amount of his Business B loss against his m... View the full answer