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  3. 1 elk is a passive investor in three activities th

1 Elk is a passive investor in three activities that have been profitable in previous...

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Accounting

1 Elk is a passive investor in three activities that have been profitable in previous years. The profits and losses for the current year are as follows: Activity A Activity B Gain/(Loss) ($30,000) ($50,000) Activity C Total $20,000 ($60,000) What amount of the suspected loss should Elk allocate to Activity B? a. $18,000 b. $37,500 c. $20,000 Od. $22,500 QUESTION 2 At the end of the tax year, Carma Corporation, always an S corporation, made a liquidating distribution of long-term capital gain property to Amy, a 35% shareholder in Carma. The property has a fair market value of $45,000 and Carma's basis in the property is $25,000. Amy's basis in Carma is $6,000 before the distribution. What is Carma's total gain or loss, and Amy's basis after the liquidating distribution? a. Carma's gain is $20,000; Amy's basis is $39,000 b. Carma's gain is $0; Amy's basis if $39,000 c. Carma's gain is $20,000; Amy's basis is $19,000 d. Carma's gain is $20,000; Amy's basis is $0

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