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23-12-2022
Business

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Green Corporation earns active income of $50,000 and receives $40,000 in dividends during the year. In addition, Green incurs a loss of $70,000 from an investment in a passive activity acquired several years ago. Consider the following two statements:(1) Green's current deduction for passive activity losses is $50,000 if it is a closely held C corporation that is not a personal service corporation.(2) Green's current deduction for passive activity losses is $0 if it is a personal service corporation.Which of the following answers is correct?a.Only statement 1.b.Only statement 2.c.Both statements 1 and 2.d.Neither statement 1 or 2.

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