During the current year, Alyssa incurred a net loss of $27,500 from a 5 percent interest in a partnership that operated and managed an office building. Alyssa had adjusted gross income from other sources of $110,000 and spent 67 hours assisting in the management of the building. Determine Alyssa's total adjusted gross income for the current year.
A)$82,500
B)$90,000
C)$100,000
D)$105,000
E)$110,000

Question

Quizplus · Accepted Answer

Alyssa's loss from the partnership is passive because she did not materially participate (less than 100 hours). Passive losses can only offset passive income, so her adjusted gross income remains $110,000.

During the Current Year, Alyssa Incurred a Net Loss of $27,500