Michelle is an active participant in the rental condominium property she owns. During the year,...
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Accounting
Michelle is an active participant in the rental condominium property she owns. During the year, the property generates a ($22,500) loss; however, Michelle has sufficient tax basis and at-risk amounts to absorb the loss. If Michelle has $130,000 of salary, $11,500 of long-term capital gains, $4,500 of dividends, and no additional sources of income or deductions, how much loss can Michelle deduct?
Multiple Choice:
a) $0; losses from rental property are passive losses and can only be offset by passive income.
b) $20,500
c) $2,000
d) $22,500
e) None of the choices are correct.
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