Smith has an adjusted gross income (AGI) of $120,000 without taking into consideration $(40,000) of losses from rental real estate activities. Smith actively participates in the rental real estate activities. What amount of the rental losses may Smith deduct in determining taxable income?

$15,000

Explanation:

For the purpose of loss relieve , allowance for losses made is considered in calculating the income tax for a period.

The maximum allowance for rental real estate activities on income tax returns for a year is $25,000 for modified annual gross income of not more than $100,000. However , for modified annual gross income within the range of $100,000 + 150,000, the allowance is limited to 50% of the difference between 150,000 and the Modified annual gross income , while a modified annual gross income of %150,000 and above attracts no special allowance.

Workings

For AGI as stated in the question , the allowance is $25,000

But if the income is a modified annual gross income ,Smith is only entitled to 150,000 - 100,000 * 50% = $15,000

i tried to find the answe for you im sorry.

the answer is: c.that person might be arrested and deported

filling w-4 form incorrectly usually would rise suspicions from government's auditors. when they notice such mistakes, they would send their teams to investigate the situation further.

if those investigation teams believe that the incorrectness is done on purpose (with malicious intent), that person can be arrested or deported