Catfish,Inc. ,a closely held corporation which is not a PSC,owns a 45% interest in Trout Partnership,which is classified as a passive activity.Trout's taxable loss for the current year is $250,000.During the year,Catfish receives a $60,000 cash distribution from Trout.Other relevant data for Catfish are as follows: How much of Catfish's share of Trout's loss may it deduct in calculating its taxable income?
A)$0.
B)$20,000.
C)$45,000.
D)$112,500.
E)None of the above.

Question

Catfish,Inc. ,a closely held corporation which is not a PSC,owns a 45% interest in Trout Partnership,which is classified as a passive activity.Trout's taxable loss for the current year is $250,000.During the year,Catfish receives a $60,000 cash distribution from Trout.Other relevant data for Catfish are as follows:  How much of Catfish's share of Trout's loss may it deduct in calculating its taxable income?
A)$0. 
B)$20,000. 
C)$45,000. 
D)$112,500. 
E)None of the above.

Quizplus · Accepted Answer

The Answer of Catfish,Inc. ,a closely held corporation which is not a PSC,owns a 45% interest in Trout Partnership,which is classified as a passive activity.Trout's taxable loss for the current year is $250,000.During the year,Catfish receives a $60,000 cash distribution from Trout.Other relevant data for Catfish are as follows:  How much of Catfish's share of Trout's loss may it deduct in calculating its taxable income?
A)$0. 
B)$20,000. 
C)$45,000. 
D)$112,500. 
E)None of the above.