During the current year, Thrasher, Inc., a closely held personal service corporation, has $67,500 of active business income, $52,500 of portfolio income, and $120,000 of passive loss.How much of the passive loss can Thrasher deduct in the current year?
A)$0.
B)$52,500.
C)$67,500.
D)$120,000.
E)None of the above.

Question

Quizplus · Accepted Answer

As a personal service corporation, Thrasher is not allowed to deduct any passive losses against its active business income or portfolio income. Therefore, the entire passive loss of $120,000 is disallowed in the current year.

During the Current Year, Thrasher, Inc