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AICPA Exam CPA-Regulation Topic 3 Question 11 Discussion
Actual exam question for
AICPA's
CPA-Regulation exam
Question #: 11
Topic #: 3
[All CPA-Regulation Questions]
Topic #: 3
The rule limiting the allowability of passive activity losses and credits applies to:
Suggested Answer:
C
Choice 'c' is correct. The rule limiting the allowability of passive activity losses and credits applies to personal service corporations.
Choice 'a' is incorrect. The passive activity limitations apply to the various partners in the partnership as opposed to the partnership itself.
Choice 'b' is incorrect. The passive activity limitations apply to the various shareholders in the S corporation as opposed to the corporation itself.
Choice 'd' is incorrect. The passive activity rules do not apply to widely-held C corporations.
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