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Exam REG Topic 1 Question 51 Discussion

Actual exam question for AICPA's REG exam
Question #: 51
Topic #: 1
The rule limiting the allowability of passive activity losses and credits applies to:

Suggested Answer: C Vote an answer

Explanation
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.

by Elliot at Jul 09, 2026, 11:22 PM

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