Hello, and welcome to the Dave Tremble show presented by Buffalo Law Wings. I'm Greg Royce, shown by Stevenson Woman's volleyball head coach Dave Tremble. And coach, obviously, a very exciting weekend last weekend. You had the opportunity to host the NCAA regional. First, let's just talk about, before we get into the matches themselves, just the experience of the kids we were going to play on their home court in the NCAAs and everything that went into it and just the whole weekend. Well, our athletic department just did a phenomenal job. And the goal of Brett Adams and our staff was to make this a special experience for the student-athletes that played and for the parents that attended. And absolutely it was. Everything was just taken up a notch from anything that you see during the season. And the compliments from coaches and parents and players validated what we were trying to do. And so I was just really honored to actually be a part of this university and with the job that they did over the weekend. Yeah, certainly, like I said, just first-class event from start to finish.  And that match kind of, you can kind of tell quickly that you were maybe a little different talent level than they were and kind of got out to a fast start and didn't look back. And some of that was one of the things I said to Mariah Savage, Lauren Jan and Chelsea Arland at practice on Saturday in front of the whole team. They're all juniors. I said, how many NCAA matches have you won? And they had to think for a second. They said, none. I said, exactly. That is how difficult it is to win an NCAA match. Of course, the last two years we've been put out first round. And try to set the stage for not looking past Hunter, which I don't think we did. And sometimes when a team played extremely well, which we did, we made Hunter not look as good as they were. They were 27 and 4 coming in. Absolutely. And so they were a good team. But they were in our court. We had a huge crowd.  And all those things worked together for us to put together a really great match. How important, like you said, to get that first win after the last couple of years going out in the first round? Well, to me, it would have been embarrassing to host and lose in the first round, to tell you the truth. So I thought it had to happen. And of course, for us to move on, it had to happen. So the girls came ready to play that night and play with a lot of confidence. And so our goal, of course, was to go to the final eight and you've got to win the first one. Yeah, absolutely. Then the next night you got Johns Hopkins back on your home floor. You know, a team you'd be early in the season. Unfortunately Saturday night, a little bit different of a match. And Hopkins was able to prevail. I'll take us a little bit through that one. Well, that was tough. And Hopkins played much better. First time they played us in a 6-2. This time it was a 5-1. The matchups were a little bit different in the front row. And to tell you the truth, we had not lost to them since 2012. And they're an excellent program. They ranked number 12 in the country. So kind of the odds just ran out against us. But they beat us. There's no question. And people kept saying, well, they're serves. They missed 16 and 17 serves. And myself, I was thinking, well, if they missed that many serves, how are they going to beat us? Well, they beat us because they passed. Our passing was not terrible. It was just OK. It was against their tough serving. But they passed us. We didn't have an ace. I'll tell you a little bit about how much they were in system and took advantage of that. And their offense is very fast. And if we have single blocking across the front, it's tough to stop them. And that's kind of what happened. They passed fantastic. And they get a lot of credit for beating us on our home court. Yeah, absolutely. Like you said a little bit. And unfortunately, you have an injury that they lost someone that they didn't have in the regional final on Sunday. And just talking a little bit about the regional final, great five-set match that Swarthmore ultimately advanced in. Yeah, well, when Sasha went down, one of their middles went down, just really unfortunate. It was the end of the third set. We were reeling, but excuse me, end of the second set. And we were reeling. And they made them rework their whole lineup. They went back to a 6-2 for a little bit. And that did not work. And we easily won that third set. But they were able to regroup. And it was 10-9 there in the fourth. And they were able to put a nice run together and win it. On Sunday against Swarthmore, it was the same kind of thing. Hopkins had beaten Swarthmore three times in a row. And they beat them twice during the season. And you know that old sports adage, it's tough to beat a good team three times. And that kind of worked against Hopkins. Fantastic match. Swarthmore deserved it. I did not think they had enough firepower to beat Hopkins. Hopkins was a little bit more tentative with their serving. They only had four aces this time. Last time they played SWAT, they had 12. So they passed a little bit better than Hopkins's used to. Swarthmore was in system. And their hitters did a great job. And they played with so much grit and tenacity and phenomenal defense to be able to beat Hopkins and move on to the final eight. And certainly as a fan on Sunday, without a dog in the fight, it was a phenomenal match. It was. I'm a volleyball fan. It wasn't that much fun that we weren't in it. But I really wanted to go and be part of the hosting team after everyone had done so much for us. And we saw a great match on Sunday. And then this morning, got some more good news. Annika Schwartz named first team All-American the first time you ever had that happen. And then Deanna Bradbury, Mariah Savage, Kate Lettridge, all-named honorable mention. Obviously, Annika, first time All-American, first team All-American you've ever had, obviously caps off a great career for her. I couldn't be happier. I couldn't be happier for Annika. She's put in a lot of time and hard work, and she's a nursing student. So that makes it, to me, a lot harder and a lot more stressful. Here's a kid that's every other Sunday night is working overnight. Yeah. That's our one-to-you-sleep. You know, before she goes to class on Monday, she said her classes started late on Monday. So it is stressful. That's life. You know, working these things out and being able to do all the things that you want to do. So it's a great cap to her career and for her to be first team and for the other three. Deanna, that's the second team she's been honorable mention. Mariah, the second team. And Katie, the first time she's been honorable mention All-American. So two of them are coming back. So I'm excited about that. Yeah, absolutely. Coaches, last time we'll have you this season. Just what do you take away from the season most of all? You know, the 33 wins, being able to host. What do you take away the most? Well, you know, looking back, you know, as a coach, you're thinking should we have lost once or twice more to kind of point out those weaknesses. But had we lost once or twice more, we would not have been hosting. So our goal was to go to the NCAA tournament at the beginning of the year and be a high seed, which we did. And we took advantage of that.  So I'm very, really disappointed that we didn't go farther. But how couldn't I be just absolutely ecstatic about our season? You know, 33 and 2, you know, what more can I ask for? I always sit down before the season and I write down worst possible scenario. To me, that was 17 and 13. If we do about like I thought 21 and 10, ecstatic would have been fantastic. I had 24 and 6. So 33 and 2. And exceeded, way far exceeded my expectations. So I've got to be very happy. Absolutely. Well, Coach, we thank you for your time this season. We'll rejoin you in the spring for the beach volleyball season. It's beach season now. Absolutely. Doesn't feel like it outside right now. No. But again, thanks for all your time this season. And you know, we'll catch up with you in the spring. I'll look forward to it, Craig. All right. For Dave Trumbo, I'm Greg Royce. This has been the Dave Trumbo Show.


Yeah, guys two robots here now some of you may know me as the sports chiropractor some may know me as The TV guy the actor and some of you may know me from my days in the early 2000s writing my scooter around Newcastle University, but Either way the one thing we all have in common is that we're part of the Newcastle University alumni and the team there have reached out to me to put together for you guys a Mixture of structures Educational stuff on how to set up your office at home now that a lot of us are working from home How to get you through this time keeping your spine healthy your mind healthy and keeping Keeping us moving forward as well mentally and emotionally. So the first thing I'm going to kick off with is It's it's an assessment. This is it's really good to have outcome measures, you know We can feel quite stuck when we're quarantining at home or we're self-isolating at home And it's easy to feel like when I'm moving forward now with all these stretches of mobility exercises I'm going to give you I want to give you an outcome measure little assessment You can do beforehand and then we can test it afterwards and you can test it week on week Now this is one of the simplest tests I do in the clinic with my patients and it is simply looking at One of things when we sit at this all day really tight in the upper body And then we get locked up in the thoracic and neck has to do this to look at the screen And we get jammed in the neck. We get headaches neck issues lower back issues and all that So this is attempts to kind of test out shoulder mobility Thoracic mobility and lower body knee mobility all in one test So look at yourself. You're right. What is the last time I actually squirted, you know Bumped around it's something that we we do as kids We used to you know as kids we sit and play with our toys and stuff like this, but it's adults We forget how to do it. We we generally don't see any lower than Toilet the bed at the car seat. We don't even get any lower. So we get weak in that lower area This test is going to test it out and see whether you've been looking after yourself If not, then it'll show you how you can improve on it So the first one we do we go back into the wall like this We're going to get our toes about two inches from the wall and we're going to have our feet at squat distance apart So about just over around about shoulder width apart toys pointed out a little bit And we're going to have our arms about twice shoulder width apart palms on the walls So we start fit the right position Arms twice shoulder width the elbows must stay dead straight And what we're trying to do is we're going to slide down the wall and you want to find at what point we're going to try And these are where what we're going to try and go all the way down And all the way back up now if you're getting to a point Where a lot of people get stuck around here They feel like they're going to fall backwards or they feel like they've got to bend their elbows to get down That's usually so I have a couple things so it's either a lack of thoracic mobility So you're lacking that extension through the thoracic and also it can be hip core and ankle issues not enabling you to get your Your bum right down the ground So that's a really good assessment as to Where you're at and some of you can come back and test yourself after all these other stretches Yeah, before I give you these stretches. I want to go through the cause What is the cause of our neck issues and things? I mean you can come in to see me as a chiropractor I can crack away at massage and all this But if you just go back to doing what cause of the issue in the first place for us We just can go around in circles the usual cause is the way we sit or a desk sale. So I'm going to use your piano stool To show you the basics of how to sit properly Now when we sit normally, it's all Using school sit upright 90 degrees of the knee in the hips and like this now to sit upright like this I'm constantly fighting gravity gravity is trying to push me down like this. I Have to use all the muscles in my lower back and my hip flexes to keep me upright like this As I start to fatigue if I do this for half an hour grabs them I'm gonna I'm gonna fall into this slump I'm gonna have to continue to look forward I'm gonna jam my head up like this and then use of the lower I get the higher I've got a hold my hand to the keyboard.  So What I want to do is you want to get yourself move yourself About halfway along the chair as you normally would and you need to get to a position where you can get your knees Lower than your hips.   This is a lot more maintainable There's a lot less muscles having to work against gravity. So you won't fatigue as easily either So this is how we sit right generally the neck and everything will just flow if we have the lower body down here In the right position the neck will naturally be in the right position. It's only once we do this There's the neck then have to do this So from there we're going to set up the desk, you know I'm going to use my piano as My keyboard So what you want to do is is make sure first with this I may need to go a little higher So if you're working from home on a you know Don in your table or something like that you may be able to use a cushion get yourself in that position Where you can still have that angle of the knees Sloping down knees lower than the hips Now the angle here should be 90 degrees or more We shouldn't be up like this and have the desk too high if the desk is too high Try and boost yourself up as much as you can or try and move to a lower desk But ideally read this nice relaxed position 90 degrees or less here and Then you want to have your head up nice and straight If you're on a laptop Then ideally we put that up onto a couple of books so that the top third of the laptop Is straight in front of our eyes? But for that you would need a wireless keyboard now That could be a really good investment if you're gonna be here for the next six months If you are just still on a laptop and the screens down there at least try to get everything else Right, and then when you're looking down at it use your eyes to look down rather than your head So you serve stuff like this just keep your head up right look down your eyes and work like that That's kind of the simplest and best way you can set up your desk just with using what's around the home I'm gonna take you guys into some of the key stretches one of the best this is a stretch It's also a strengthening exercise Most of the time we get really weak in these muscles between our shoulder blades. They're constantly stretched and They're still on But they're just they're on all the time. They're not getting blood flow through them That's why it's so tight get trigger points. They're not actually working on and off They're just constantly kind of on holding in a stress position. So This is called the wall angle the way this one works.  We want to keep the elbow and the fingers Contacting the wall the whole time Now ideally we start the easy version is we just go straight up till we get straight elbows and Back down now that elbow and the hands has to stay in contact with the wall Most people with elbows want to come off the wall if you're really tired now in the back Have to keep the elbows on the wall if you can only get to there just go to there work to that range Don't let the elbows come off if you can't do two arms. Just focus on one Open one at a time get that one good get that one good and then eventually you'll be able to do it together So it starts to look like this you breathe out as you push up You don't want to go too wide and you don't want to go too close. You just want to go up and end up in a V now The next step to this what we're aiming for is we want to actually roll the pelvis back and get the lower back Flat on the wall and have no gap in there. So some people really struggle with this But essentially it's just like we're trying to roll our pelvis back It's almost like someone's trying to pull your belt up Even if you have to slump for a little bit slump get that lower back stuck on the wall Then start to peel up a back up get the shoulders on neck on bum on now Test and see have I still got that lower back pushed in what you find is the tummy Draws right in because it's the abs trying to keep a little slope in the knees But it's the abs pulling that low back into the wall then so we've taken out all that lumbar extension and We're creating pure thoracic extension So the arms go back up elbows on fingers on it We keep that lumbar spine pushed against the wall You can start with one arm and you can sort of feel so as you push up your lower back wants to come off the wall You've got a push and squeeze all the muscles between the shoulder blades To keep the elbow on the wall as you push up and keep the lower back on the wall So it's this co-contraction between we're trying to pull in here But we're trying to extend the upper back at the same time So you find all these muscles in here You're trying to like a rusty hinge They're trying to get some extension in our thoracic and up the back. That's been so locked up for so long So low back on the wall. It's going for two hands. I'm just gonna do three sets of eight. It's a big breath in and then That bit that's really hard relax the neck Pushing up you're making sure as I push up my abs are working really hard to keep my lower back Bloody it's the wall now. You'll see me in the gym doing this with no weights in my hand, but I'm going And that's essentially really we're working some of these muscles They're not pushing against gravity or a heavy weight. They're literally pushing against other tight muscles So you're getting a stretch and strengthening at the same time Eventually what may seem really hard right now will gradually become easier But this is one of those ones that kind of like brushing your teeth and flossing your teeth This exercise the wall angle is one of the best exercises you can do when you get off the wall You've done three sets of eight You will feel so tall so elongated it you probably grow an inch and your head Will feel like it's more over your body instead of you know that forward head push to that people walk around with because They're stuck in the desk like this.  So that is one of the best exercises you can do the wall angle The next one is because we constantly sit in this Flex position, you know hip our hip flex up short Really good way to strengthen that is to we're going to drop down.  So we don't put too much pressure on the knee What we want to do is we want to have a straight line from the knee through the hip through the shoulder So it's not like a normal stretch where you're right forward like that Which you might have done playing 40 or whatever. It's it's straight above the knee like this now What we do is we're going to Contract and squeeze the hell out of that blue so tired and you'll get this Backwards rotation of the pelvis so forwards would be forward like this and you'd feel that arch in the tummy sticker Backwards you're gonna it's like your belly button is drawing in the pelvis is rolling backwards You know squeeze that like yourself in the bum hold that for 15 seconds now This is a an agonist antagonist contraction The harder we squeeze the glute the more we get the hip flexors to switch off and actually stretch And you should feel a stretch through here without even having to go into that full hip flexor stretch because you've got so much rotation in there and You might find that they glued holds for five seconds and then it starts to weaken a lot of us I've got weak inhibited glutes. You want to continue keep punching yourself in the bum if it goes a bit floppy again Remind it squeeze it breathe and hold that hold for 15 seconds then do the other side That is a really good way to switch out glutes on But also to switch our hip flexors off and stretch them at the same time So then when you're standing up straight up the hip flex some kind of pulling us into this this duck bump position We're getting that nice stretch through there pelvis becomes more neutral as well That's the second last stretch the last stretch is the Jefferson core This is again mixture of a stretch and an active motion. So with this one What we're trying to do is remind our body that we have all these different vertebrae a lot of us We get get stuck in our body starts to perceive that you know T1 the T12 is just one big block it moves as one block We can bend a little bit over the belly button, but that's it You should really be able to bend every little vertebrae at different levels. So we're going to start with the neck and we go C1 C2 C3 C4 C5 keep all this normal neutral C6 C7 T1 T2 T3 T4 T5 T6 So work your way down each little vertebra Then we get into so the lumbar started really bent through the lumbar here We're gonna get into lumbar so you get L1, L2, L3, L4, L5 If you can use your hands to support you're all the way down and then let it hang Then we're gonna start curling up so we're gonna leave our body hang But we're just gonna start one at a time L5, L4, L3, L2, L1 Then we're gonna go into the thoracic T12, T11, T10 T10, T9, T8, T7, T6, all the way up to right neck C7, C6, C5, C4, C3, 2, 3, 2, 1 So that as you put it together will start to look smooth It'll be nice, smooth, roll down Make sure as you get to here, don't start bending at the hips here Keep the hips forward, curl down, down, down, keep the hips there And then slide all the way down Same, you come back up Keeps the forward and slowly work your way back up That reminds the brain as you get better and better at it It's like a rusty hinge, we're just trying to get our spine each level Just moving again, instead of it having all the big blocks in it So it's a really nice one, but you want to keep some intriptominal pressure So as you go down you can do a bit of a ksss Like a car tire as you're letting down some air You want to have some intriptominal pressure to help support the spine So you can do a bit of a, as you go through it may sound a little silly But it will get to understand that You need that intriptominal pressure to support the back You can have your hand slide down as well Especially if you've got some back injuries to start with Now, if you do have any injuries through this Just always just take it easy Support, just take it one bit of time You may find at the moment you can go to here And that's it, and that's enough for you Just take it one step at a time So, that's pretty much it, you know I think this all is to help you guys To work from home And to get the most out of Just to keep you feeling productive Keep your mind twitched on Keep your body healthy whilst in isolation Now, it's really easy to feel Like we're a little stuck, you know In this moment you might be out of work Work might be on hold Life, the pace of life has slowed down Definitely for a lot of us And it is easy to feel stuck Like we're not really moving forward But one of the things you've got to remember that This can be a time where we just binge on Netflix And we, you know, life goes on hold Or it can be a time where we actually Continue to learn, we continue to develop We continue to develop our bodies You know, we may not be able to go to a normal crossfit gym Or yoga sessions or whatever But it's a time to learn new things So it takes some time to learn this stuff Get the basics right So when you come out of this You're coming from a healthier foundation Physically, mentally, emotionally Getting this meditation There's so many things out there So much free advice, so much free knowledge you can get But then also from a work point of view You know, it is a time to increase our qualifications To increase our knowledge, our skill base Our motivation You may want to learn a language, whatever it is Anything that can help you to become More employable after this If you're not in a job right now Or to increase your values So that down the track you can be paid even more Because you're worth more, because you've got more knowledge So it is definitely a time That we can continue to move forward And not feel stuck So I urge you to look for How can I continue to, you know To have a check of this each day To keep me on point How can I push through this and come out You know, better, stronger, smarter More inspire, more knowledgeable And not just come out in six months As I was, or even worse off Than I was six months ago So I think there's so much that we can do There's so much that we can do We can inspire others, keep inspiring The other, you know, the Newcastle University alumni Inspire your friends, inspire people you work with And I thank you for the privilege To be able to do this, to share some knowledge And I hope that you guys put it to good use And when we all come out of this Be a better, faster, stronger, smarter Healthier, wiser


Hello and welcome to this session. This is Professor Farhad in which we will discuss passive activity loss limits passive activity loss limit falls under the umbrella of investor losses so if the investor incur losses, how much of those losses can we deduct now in order to understand the passive activity loss We have to understand what is called at risk limits for investors in the prior session We did cover the at risk limit. It's basically what is what is the money? What is the capital? What is the wealth that is exposed for an investor and that's the amount that the investor can deduct So first we have to determine how much are you at risk at and we did determine this in the prior session Basically what cash you you invested in the business any property you contributed any loans You took out and you're personally liable so on and so forth So first we have to determine are you at risk? So do you have basically money on the line money at risk if that's the case? Yes, you might have losses that you can deduct the next thing We have to figure out is is your activity passive or active? Why do we have to do that? Also if you remember from the prior session the IRS looks at your income Bucket your income in three buckets put them in three buckets Active income portfolio income and passive income. We need to understand what is active income versus Passive income. Well, what is active income? Well, active income is income that's generated by the taxpayer through the active engagement in a specific activity Like what we talked about this in the prior session, but let's do it again Salaries and wages you are earning you are actively earning your money Guarantees payment business income from activities in which the taxpayer materially participate and we're gonna spend a little bit more time in this session Defining what materially participate is simply put Just to keep it simple. Let's assume you own a farm and you work on that farm Guess what? You're the owner of the business and you actively cultivate the land plant the land so the land so on and so forth So you are active Okay, now we could also have a portfolio income and this is when your money is working for you Investment income capital gains interest income dividend income annuity and royalty Basically, your money is working for you in form of investment. That's fine, too. It's called portfolio income Now we also have what we called passive income Also, it's an income from trade business or income producing activity So notice just like active income through active engagement in specific activity in a trade in which the taxpayer does not materially Participate, let's go back to my farm example. Let's assume I own a farm, but you know what I never visit that farm I don't plant any fruit or vegetables Or cloud the land or anything like this I just I invest my money and someone else takes care of it and at the end of the year They will send me a statement. Let's assume I own 20% They will allocate 20% of the profit or the loss to my account. So what am I here? I am a passive I am a passive investor here. I don't participate. So my income is passive not active now Why do we have to know about this passive income? Well Passive income can be used as a tax shelter simply put if you remember the story I told you back in the 80s real estate rental business Assumed to be passive because what was happening is this many people with high income with a lot of w2 income or Active business income what they would do they will buy real estate property and they would rent it out and as a result They will generate losses, but they were not actively participating. So simply put the IRS says you cannot take your losses From a passive activity and offset your income your active income So when we talk about passive income, we always assume that real estate rental business is assume It's a passive and there are two exception will talk about those two exceptions later Now if you have a schedule C if you have a business like a schedule C business You you could be passive or active if you have an S if you're if you are a shareholder in an S corporation a Partner you can be passive or active. So it depends but Rental real estate is considered always Passive so passive is if a taxpayer does not work on a regular Continuous and substantial basis in the business remember I own the farm, but I don't I don't know anything about that form I don't know anything about the farming business. Well, guess what? I am I have a passive income here if there's any income and passive loss for that matter so If I don't do so in the business the losses are considered to be passive. What does that mean? Well, if the losses are passive, they are generally not deductible in the absence of passive income So I have passive losses. That's a great. I can only I Can only offset them against passive income So I have to have a passive income in order to use my passive losses now again if you remember in the prior session I gave you this example. I'm gonna show you the picture real quick Remember, I told you we have two doctors and a lawyer and what did they do for they purchased a shopping center And they rented out and they generate losses. So that's why Rental business especially real estate rental is always assumed to be passive Unless you have two exceptions. We'll talk about those later But what is in general a passive activity? And this is what we need to focus on because if we know what if we can define what a passive activity is Then we know what a passive income or passive loss for that matter Before we define passive activity, I have an announcement about my company farhat lectures comm Farhat accounting lectures is a supplemental educational tool That's gonna help you with your CPA exam preparation as well as your accounting courses My CPA material is aligned with your CPA review course such as Becker Roger Wiley Gleam miles my accounting courses are aligned with your accounting courses broken down by chapter and topics My resources consist of lectures multiple choice questions through false questions as well as exercises Go ahead start your free trial today. No obligation. No credit card required So do we have a passive activity? So is this a passive activity to determine whether we have a passive activity or not? We have to address three questions and the first one is what is an activity? What constitute an activity? What is the taxpayers material participation? And remember I told you we're gonna talk more about material participation and that later is now soon and the third thing And when is an activity a rental activity simply put if it's a rental activity What do we have to do and that's gonna be an easy answer here with the two exceptions Starting with the first of the three questions Identification of an activity well under the treasury regulation Which is the IRS follow an activity is defined as one or more trade or business activities or rental activities that form an Appropriate economic unit for the purpose of measuring the taxpayers gain the losses simply put some sort of a business unit Where you are measuring your gain or losses. It could be more than one. It could be one You can combine them so on and so forth. So when you're identifying an activity or Group or group and of various activities together all the relevant factors and circumstances can be considered So you could have one unit or multiple unit grouped together or separate? Once activities are grouped and you're gonna see why that's important Erie grouping generally is not allowed unless the original grouping was clearly Inappropriate or the fact or the circumstances have materially changed So if you group two or three business together and told them this I'm gonna consider this one unit Then you change your mind. You have to justify it or if you have them separate Then you change your mind. You're gonna have to justify it So it's allowed that you have to justify it, but let's look at some examples to illustrate the importance of grouping Grouping the business unit. Let's assume Maggie owns a business with two separate units X and Y Maggie but materially participated in managing X but does not get involved in Y. So simply put material We're gonna see what materially participate is but for now just in other words. She runs the business on a day-to-day basis She makes all the decisions She hire fire make pricing decisions so on and so forth for the current year The X the unit acts a generated income of a hundred thousand. This is where Maggie Participates while unit Y Reported a net loss. Why because Maggie does not participate. She's she's silent in that unit if Maggie treats X and Y Units as component of the same activity then she can lose she can use the loss reported in Y Which is 37,000 to offset the income generated an X So if they are one unit, we would report them together. We net them out. They're considered one unit However, if Maggie is not allowed or it doesn't make any business sense or just it clearly They're not related to treat the two unit as a single activity Then here's what's gonna happen Maggie will have a hundred thousand of active income because remember for unit X Maggie is Materially participating and a passive loss of 430 save them from unit Y What can we do with this passive loss of 37,000 nothing for this year? We have to wait until we have a passive income to offset the loss Therefore we'll carry it for future year Maria owns a vape store and a restaurant in Maryland I don't recommend vape stores, but that doesn't matter. That's what she wants to do She also on a vape store and restaurant in Boston and deciding how to group her activities Any of the following alternative could be reasonable. How can she do it? Well, she can say I'm gonna group all four activities together And she'll the sole owner. So this is grouping based on the owner's identity or She can group the activities in Maryland together and the activities in Boston together And she's gonna say I want to group them based on geographical areas or she can group them The vape stores together and Restaurants together based on the type of activities or she can treat each unit or each activity as a separate stand-alone activity again, it makes a difference whether Whether you have each one is treated as passive or active when it comes to netting So that's why you have to be careful. Am I grouped them together? Am I not? Which one is active which one is not so you have to be very careful in how you group them But the point is you do have that flexibility Let's talk about material participation and that's important Here's what's gonna happen The IRS basically state that a taxpayer is considered to be actively participating in an activity if he or she Meets one of the following seven material participation tests You only have to meet one and you're gonna see at the end You could meet anyone and we're gonna see what does that mean in a moment the taxpayer participate in the activity more than 500 hours during the year so you can if you can show you participate in the activity actively participate more than 500 hours, you are considered to be active. You're done To the taxpayer participation in the activity is substantially all the participation in the activity of all individuals for the year Well, sometimes you might have a small business and you're by yourself and you don't spend 500 hours But basically, you're the only person that spend hours in that business whether those 50 or 500 you spend all the hours now You are considered active because no one else in that business then you are active who else is running the business if you are not Right, you are active The taxpayer participate in the activity for more than 100 hours during the year and not less Then the participation of any other individual in the activity So you spend more than 100 and not less and no one is above you So you're basically running the show therefore you are considered to have active participation The tax the taxpayers participation in the activity is significant And the taxpayer aggregate participation in all participation activity during the year exceeds 500 hours And the significant participation is more than 100 so you so 100 hours you're doing heavy duty and a total of 500 Five the taxpayer materially participated in the activity for any five years during the last 10 year period So simply put in the last 10 you've been you are considered to be materially participate materially participating Therefore you assume to have active role The activity is a personal service activity in which the taxpayer materially participated for any preceding three years personal service lawyers Architect accountant and if you are materially participating for any of the three preceding years You are still running the show. You are an active business owner Seven and look at seven And this is what I was talking about at the beginning based on fact and circumstances The taxpayer participated in the activity on a regular continuous and substantial basis Now when we say base based on fact and circumstances because the irs can nothing of every possible scenario So they thought of this scenario as definitely you're an active But you can always argue that I am active based on the fact and the circumstances and you have to prove that Because regular continuous and substantial is not defined actually in the regulation So that's why you can argue as long as you can prove to them that you are active then You are active now bear in mind investor type of work does not count So if you're obtaining a loan raising money meeting with potential investors creditor Reviewing financial reports financial statements for the purpose of investing in the business Then those are called investor type work and those hours does not count Let's look at an example during the current year john cpa earned the net income of 450 000 for a miss cpa practice additionally John owned an interest in activities b and d in which he does not materially participate He incurred the loss of 20 000 from b and a net income of 15 000 from d Now john if he put an additional 50 hours In activity d it will be treated as a active business active income it will be treated as materially participating Let's see to determine if john's attempt to meet the material participation standard for d It's important to understand the tax is so the tax consequences. So let's see if that's a good idea Without the material participation both activities are treated as passive And guess what the loss in b Maybe offset the gain in d. So simply put if they are both if they are both if they are both Passive we can take 15 plus a 20 negative 20 plus 15 and we were able to offset Offset remove this and we still have 5000 but we're able to remove 5000 of net income however If john materially participate in d and d becomes an active business Then we have a net income that's going to be report and well a net income or revenue or profit or income of 15 000 and a loss Not there's nothing we can do with it because this becomes passive This this is is passive and this the 15 000 is active This becomes taxable And there's nothing we can do with this passive loss. So it's in john's best interests Given the circumstances not to turn d into an active business because if you do then you cannot You cannot use the 20 000 of losses. That's what we're trying to say here Another example jane an attorney owns a restaurant that reported a net loss in the current year That's fine restaurant reported a net loss during the year jane worked 450 hours in managing the restaurant And 20 hours in doing genitalial activities her husband julian participated 80 hours in the activities relating relating To more related to marketing and sales Okay, so let's see if jane is an active participant and how do we count those hours? Assuming that activities were not performed to avoid any disallowance of passive activity losses jane qualifies But let's see how she qualifies in the restaurant She's gonna count her hours and her husband's hour simply put you can count your hours and your husband's hour together Now you're saying hold on a second That's 5 30 that should be right because she also put 20 hours doing genitalial activities Here we're gonna have to kind of think about you have to be managing Actively participating making decision Just rack and up hours will not count. So doing genitalial activities will not count Now what counts and what not counts? Obviously, it's not clear cut But the point is if it's not managing doing doing major amount of the work making major decision Then it's not managing the business. It's not actively participating It's important to know that genitalial activities are not included in the activity This is just adding up hours not allowed. For example, also, let's assume jane wants to cut the grass Mode the lawn outside the restaurant that does not count that does not count The third the three of three is the rental activity and this is easy subject to two exceptions Which we'll talk about all rental activities are automatically considered passive activities because rental activities is what brought Brought all of us into this lesson because rental activities were being abused in the 80s I talked about this in the prior session where people were buying rental property generating losses from high interest and depreciation and offsetting those offsetting the losses Upsetting their taking the losses and offsetting their active income So we have two exceptions. We have to talk about from rental activities the mom and pop exception in the real-estate professional starting with the mom and pop under the mom and pop exception the taxpayer is allowed to deduct up to 25 000 Of net losses from rental real-estate activities and any access loss is carried Forward as a suspended passive activity loss for a future year The deduction amount is reduced by 50 of the taxpayers agi in access of 100 000 and the deduction is completely eliminated at 150 so simply put Up if you make up to 100 000 if you have agi of 100 000 really it's it's a modified agi But no one cares about the m if your agi is less than 100 000 you can deduct up to 25 000 Once your agi exceeded 100 000 your 25 000 will start to go down Until you reach 150 once you reach 150 in agi the government says you're making too much money You cannot use those losses. You cannot use those losses A taxpayer who's actively engaged in a in a rental real-estate activity and owns at least 10 of the activity is eligible. So you have to own 10 of the activity to be eligible 10 of the Property and most of these properties are owned 100 by the mom and the pop Usually what this happened like for example, I'm I'm planning on selling my home now buying a new home I'm waiting for the real-estate market to slow down a little So what I'm going to do if the real-estate market slowed down more than a little a lot I'm not going to sell my house. I'm going to keep my house rented out by the new home So I will be a mom and pop exception. I just I'm just because of my I bought a second home I don't want to sell my current home because the market went down the market doesn't have to go down I may just keep the home as a second business as a as a second Source of income. It's a lot of headache, but this is the point. So these these people mom and pop They own 100% usually of the business usually And the active management require an active participation here You don't need material participation, but an active active participation and making Decisions in a significant and bona fide sense in what sense you are making decision to run the business Like what type of a major decision do you make as a landlord? Well, approving tenants deciding on the rental terms approving cap approving capital or repair expenditure also How much to charge if you're making those decisions? Well, it doesn't have to be, you know It doesn't have to be 500 hours. It doesn't have to be anything as long as you're making those decisions And you meet the other qualification Guess what you qualify? Not you qualify in case you have losses You can use up to 25 000 of losses against your active income The second exception you have to be a real considered a real estate professional Who are the real estate professional an individual who provide more than 50 His or her personal services in real estate business So basically provide More than half of their time in this business and at least that amount to 750 hours in real estate property business Now you are considered a real estate professional And his or her income is treated as an active income. What does that mean? If it's active income That's good because if you have active losses, you can if you have active losses You can deduct the active losses against other active income. Now you are your activity is considered active like basically It's active income because that you are in the business of real estate. Therefore any income any losses They are treated as active now the spouse participation are not taken into account When evaluating whether the taxpayer work more than 750 So just be aware of this in case they added the spouse's hours for to be considered They are not considered. You cannot use the spouse's hour Versus if you go back here just the reason I'm showing you this is I want to Show you the difference between the two spouses here under Jane her Her and her husband hours were counted. So just be aware of this under the real estate professional Not at all you are counted separately, but here you combine them for this purpose for the material participation Let's go back and finish the real estate professional Also personal services performed as an employee are not treated as performed in real Real property trade or business unless the employee owns at least five percent of the business So if you acted as an employee, let's assume you are running, you know, you're running the credit of the individuals of the tenant I don't know. You are mowing the lawn. It doesn't matter what you are doing If that doesn't count unless you own five percent of the business because if you don't own the business And if you are working in the real estate business, but you don't have any ownership Then you're an employee. You cannot be considered a real estate professional and notice the threshold is pretty low You only have to own five percent for those activities for those activities to be counted toward your 750 hours Let's take a look at a few examples We have mario has an aji before any consideration of rental property of 120 000 He has a loss from a rental activity in which he actively participate In addition, he has a passive income of 15 000 from another rental property So what is the amount of rental activity loss that mario is allowed to deduct in the current year? Well, let's take a look First his aji is below 150 So we're going to assume that yeah, we're below 150. Therefore he qualifies for 25 000, which is good Let's see what we're going to do first mario can offset the 15 000 of rental loss against the passive income because they are both Considered passive. So we'll have a remaining passive loss of 60 000. So basically what we did We took the 15 000 of income plus Minus the rental losses of 75 you are left with 60 000. What can we do with the 60 000? Remember mario is in the 120 000 aji range So mario is actively engaged in real act in rental activity. Therefore, he's eligible for the mom and pop exception Which allows up to 25 000 of passive losses from rental activities against other income That's the good news and the good news more is he can deduct it But the allowance of 25 000 is reduced by half Have the access of aji over 100 000. So what's going to happen? We look at the aji in access of 100 000, which is 20 000 and you can you will take half of that, which is 10 000 As a result, so as a result, I'm sorry You will be reduced by 10 000 as a result if we have 25 000 Reduce it by 10 you are left with 15 Or you can another way to look at this is if this is the range the range is from 100 to 150 And you are 20 20 000 into the range So 20 000 that the whole range just kind of The whole range is 50 000. This is where you start to lose the whole range is 50 000 your 20 Over 50 inside the range. So you're 40 percent inside the range as you go move inside the range You would lose your you would lose your you will start to lose so of the 25 000 What what's going to happen is you're only going to keep 60 percent of it. Well, let's see what's 25 000 times 60 percent 25 000 Whoops, too many zeros times 0.6 That's 15 000 therefore you qualify for 15 000 Or you can take the amount over aji divided by two and that's the amount not allowed and you can deduct it from the 25 Either or will be good. Just understand you are 40 percent Into the aji range the range started at 100 000. So how much can mario deduct? Well, total how much had he deducted total of 30 000 the first 15 000 Went against the 75. So we have 75 000 and losses We used 15 000 immediately against the income were left with 60 then for the remaining 60 were able to take another 15 We just computed this 25 000 times 60 percent a total of 30 000 Now we need to know what would what would we have to do if we go from a passive activity to a active activity So basically we had a passive activity or go back to my farming example Now I decided to be a farmer. Okay when a passive activity changes to an active activity suspended losses From the years in which the activity was passive may be deducted against the income from the newly becoming An active activity now any losses suspended now I can use them Any remaining suspended losses is carried forward to offset future income From the formerly passive activity or income from the from other passive activity So the good news is you don't lose them if you change if I decided to go back and be a farmer now I just want to leave my job and be an active farmer rather than just own shares in a farm Then that will be the case. Let's look at an example over the previous three years Lisa has owned an interest in a single passive activity At the beginning of the current year when Lisa's total suspended passive losses amounted to 50 000 She increased her hours of participation and she became a material participant in the activity That's fine. She has 50 000 of losses Lisa's share of the current year's income from the activity is 30 000. Well, guess what now? I'm gonna use those suspended losses And offset all my income of 30 000 and what happened to the remaining 20 000 Maybe carried forward to offset future income Future income from this activity or income from other passive activities So really it's a good thing if you decided to go from passive to active and you have suspended losses That's not a bad idea. What should you do now? Go to far hat lectures and work mcqs and true false to help you understand this concept better This is considered challenging for many students cpa candidate as well as accounting students Read your book use your material Good luck study hard and stay safe


Hi and welcome to the session. I am Neha and today I am going to help you with the following question. The question says 72% of 25 students are good in mathematics. How many are not good in mathematics? Let's see its solution. In this question, we are given that the students are good in mathematics 72% of 25 that means total students are 25 and out of 25 students 72% are good in mathematics. Now we know that 1% is equal to 1 upon 100 in fraction so that means 72% is equal to 72 upon 100. So this is equal to 72 upon 100 of means into 25. Now 125 will get cancelled by the common factor 25 and 72 and 4 will get cancelled by the common factor 4. So we will get 18. So this means that 18 students are good in mathematics. Now we have total students equal to 25. Now this implies number of the students is equal to total students 25 minus students good in mathematics that is 18 which is equal to 7. Therefore percentage of the students not good in mathematics is equal to now number of the students not good in mathematics is 7 out of 25 that is total students fraction into percentage we need to multiply it by 100. So percentage is 7 upon 25 into 100 and 25 and 100 will get cancelled by the common factor 25 and we will get 28%. 28% students are not good in mathematics and this is our required answer. With this we finish this session hope you must have understood the question goodbye and take care.


The first item of business this afternoon is portfolio questions on finance, constitution and economy. Q1 Willie Coffey To ask the Scottish Government what measures it has introduced to boost the economy in Kilmarma in Irving Valley. Cabinet Secretary John Swinney Scotland's economic strategy reaffirms our commitment to increasing sustainable economic growth for all of Scotland, which is essential to achieving a more productive, cohesive ac mae hyn yn cychwyn eu congratoli ciwyr y gynalydd. Mae genedlaeth ymdeliadau amser i gyfnodau i gyffinol yn Comarnock a Irving valley. Willie Caffee With that answer, as he will be aware that dairy industry is an important part of the local economy. How does the cabinet secretary see the recently launched Dairy Action Plan assisting local milk producers and how might that benefit the local economy in general? Cabinet Secretary for Energy and Connectivity Mr Coffey ddim yn yr yw y clywbeth cyfwyr i'r tiw lleol iawn ar gyfer gyfer cyfwyr gan ésas pan oedonig cymodegau y Chymar break mewn ddod y myraddiadau.  Ieidol i'r gwneud i ddiogel eich cwmwyomes cwmwyomes i gaeligio i gaeligio i cefnodau i gaeligio i gaeligio i gaeligio i gaeligio i gaeligio i gaeligio i gaeligio i The cabinet secretary will be aware how important Kilmarnock College as part of the Ayrshire colleges is to the economy in Kilmarnock and the Irvine Valley. The cabinet secretary will also be aware of the funding shortfall in the Ayrshire college budget for 2015-16, a shortfall that is being met in this financial year by turning the depreciation into hard cash. Will the shortfall in the 2015-16 budget for the Ayrshire college and others be again met by using cash allocated in budget terms for depreciation to meet the cash requirements of student funding at that time, or will other sources of funding be provided? Mr Scott will be familiar with the allocations of resources that have been made as part of the annual budget round, which was concluded in early February, which gave allocations to the Scottish funding council, which of course then in turn distribute the resources to the Ayrshire college. The dialogue about the appropriateness and the utilisation of the resources available to the funding council and then by onward transit on to Ayrshire college is a matter for the funding council to determine the dialogue and discussion with the Ayrshire college, and the Government would expect that dialogue to focus on supporting the achievement of the outcomes that the Government seeks from its investment in the further education sector. To ask the Scottish Government what action it is taking to improve the economy and public services. The Scottish Government is committed to creating a more successful country with opportunities for all of Scotland to flourish through increasing sustainable economic growth. Scotland's economic strategy set out an overarching framework and actions for increasing competitiveness and tackling inequality in Scotland. We also remain focused on delivering a cross-sector programme of public sector reform, and a clear strategic direction for protecting and improving Scotland's public services is now well established. The main fiscal policy of the SNP Government is, of course, full fiscal autonomy, which would lead to £7.6 billion of cuts according to the IFS. The finance secretary tells us when he wants to see full fiscal autonomy come into force. Why does he think that a policy that would lead to £7.6 billion of cuts is a good idea? The first thing that I would say to Mr Bibby is that I believe that full fiscal autonomy would give Scotland the economic levers to strengthen our economic performance and as a consequence to improve the productivity and, as a further consequence, the public finances of the country. I do not really think that that is a particularly surprising ambition given the fact that I thought that we were all here to try to improve economic performance and to deliver stronger public finances as a consequence. If Mr Bibby is the slightest bit concerned about cuts, then he should look at his Labour Party proposition for the forthcoming election, which has signed up to the Charter for Budget Responsibility, which involves £30 billion worth of cuts. Before Mr Bibby comes anywhere near me, he should reconcile the issues of his own party and the slash and burn of the cuts that the Labour Party will impose on public services in Scotland. Question 3, Gavin Brown. Thank you, Presiding Officer, to ask the Scottish Government whether it will provide an update on the implementation of the Revenue Scotland IT system. Cabinet Secretary. The implementation of the Scottish electronic tax system is an operational matter for Revenue Scotland. I discussed this issue with the chief executive of Revenue Scotland this morning. The system opened for sign-up for both the devolved taxes on 16 February and registration open for the Scottish landfill tax on the same day. The online return for land and buildings transaction tax has been available to users since the 24th of March. I am pleased to inform Parliament that the chief executive confirmed to me that, as planned, the system has today started to collect the first national tax introduced by the Scottish Parliament in over 300 years, and it undertook that online. Gavin Brown. I am grateful for that answer, and I am glad that the first one went through. What percentage of transactions today approximately does the Deputy First Minister think will be done through the online portal? I do not know what that proportion will be. It will be for the market to determine, but I can say to Mr Brown that, as of about 145 this afternoon, 83 transactions had been undertaken on the online system. I told Parliament that the online system would be available for operation on 1 April. There were some doubters in Parliament. I would have thought that some of them could have come to Parliament and congratulated Revenue Scotland on the achievement of having an online system available, but perhaps that is too much to ask on a Wednesday afternoon. Can I congratulate Revenue Scotland for operating online? Before we congratulate ourselves, yesterday a firm of solicitors contacted an MSP to complain that the new land and building transaction tax forms were not yet available. I am assuming that is because he was a day early. However, the cabinet secretary will of course be aware that conveyancing transactions cannot be registered at register house without a tax-paid certificate, so can he confirm that there are no problems at all with the implementation of Scotland's new landfill tax and also the land and buildings transaction tax? I am grateful to Jackie Baillie for her warm words towards Revenue Scotland. It is in stark contrast to what she was driffling on about in the Times on Monday, on the issues in the Times newspaper. In relation to the implementation of land and buildings transaction tax and landfill tax, the Government has taken forward the arrangements to put them in place. There has been good co-operation between the Registers of Scotland and CEPR, who will be involved in the administration of both taxes and to put them in place in co-operation with Revenue Scotland. I am satisfied with the arrangements that have been put in place. Cabinet Secretary, I will use this opportunity to remind all members that they should use parliamentary language and be respectful to each other. To ask the Scottish Government what recent discussions it has had with the UK Government on the implementation of the Smith agreement. Since the United Kingdom Government published its draft clauses on 22 January, the Scottish Government has provided a range of detailed comments on the drafting and the scope of the clauses, with the aim of ensuring that it implement the Smith commission recommendations in full. That has been accompanied by discussions at ministerial and official level, including two meetings of the joint ministerial working group on welfare. The Scottish Government has also started work on development of the fiscal framework, which will be a critical element in implementing the Smith commission proposals. I met the Chancellor of the Exchequer on 2 March to discuss the progress on this work. I thank the Deputy First Minister for that answer. He will be aware that the academic analysis by Robert Gordon University shows that the draft new clauses watered down the already minimalist provisions of the Smith agreement. Does he agree that the absence of the power to create new benefits and the restrictions placed on the categories of people to whom benefits can be paid clearly shows that the UK Government is already reneging on the implementation of the Smith agreement and that therefore the only way to deliver significant additional powers to this Parliament is to send a strong team of SNP MPs to Westminster to speak up and stand up for Scotland. There are a number of issues that the Government has raised with the United Kingdom Government in relation to the detailed definition of the clauses that were published on 22 January. We have shared with the devolution of further powers committee the detail of that information that we believe has to be addressed. The Scottish Government has engaged constructively with the UK Government on the specifics of what we believe is deficient about the draft clauses put in place by the UK Government and which are now subject to consultation. I should point out to Mr Eadie that a number of those observations have also been reinforced by the observations of a number of the stakeholders who have been involved in the dialogue around the implementation of those clauses. I hope that those issues are properly addressed by the incoming UK Government. We have made that point in our discussions. Finally, Mr Eadie is absolutely correct that the best approach to safeguard Scotland's interests will be to secure the election of a strong team of SNP MPs at Westminster, who will be able to protect and promote the Scottish interests on all occasions and without reservation. I note that the Scottish Government has stopped preferring to V2s being contained in the new powers. Will the cabinet secretary confirm that the two Governments working together constructively to deliver the new powers will do much more to secure Scotland's interests than trying to undermine the process? I will happily restore the veto word to my answer if it would suit Ms Goldie better, but there is a very serious point at the heart of what Ms Goldie raises. Ms Goldie says that there is no veto in all of this. In the Smith commission proposals, one of the commitments that Ms Goldie and I made was to secure the earliest possible devolution of the work programme. Essentially, last week, the UK Government vetoed the early devolution of the work programme. During the course of the Smith process, Ms Goldie and I argued for the work programme to be devolved earlier and were echoed in that position by the Labour Party. Indeed, a Labour member of Parliament in the Westminster Parliament, Ian Murray, has put forward a private member's bill to seek the earliest possible devolution. I think that this summer, if my memory serves me right, of the work programme, that has been vetoed by the UK Government. It is not just that it has been vetoed, the contracts have been extended against the express will of the Scottish Government. I am all for co-operation on the substance of those issues. I have marsaled to the UK Government a detailed list of areas where we think that the draft clauses are deficient in terms of the objectives of the Smith process, and we have shared that with the devolution for our powers committee. I do hope that we have a willingness to engage constructively and solidly in implementing not just a letter of the Smith commission report, but the spirit of the Smith commission report into the bargain, which, on the example that I have cited to Ms Goldie, was about early action to ensure that the earliest possible devolution was delivered off the work programme. To ask the Scottish Government whether it has filled all the vacancies at Revenue Scotland. The staffing of Revenue Scotland is an operational matter for Revenue Scotland. I spoke to the chief executive this morning. She confirmed that 38 of 40 operational posts have now been filled, providing Revenue Scotland with the breadth and depth of experience that it requires to collect and manage the devolved taxes. Recruitments processes are under way for the two remaining posts, neither of which was identified as critical for the first of April launch. Thank you, Deputy First Minister, for your reply. Have the salaries offered been increased, and if so, what impact will that have on the organisation's cost? Cabinet Secretary? There have been no increases to salaries beyond what we have set out in the public audit committee as part of this process. There are no changes to the financial arrangements that have been shared openly by the Government. We have done that on a number of occasions. We set it out at the stage of the financial memorandum. The chief executive of Revenue Scotland was in front of the audit committee and the France committee in December, if my memory serves me right. Further information on financial provisions has been made at those stages, and there are no changes since those updates were given to the relevant committees. Question 6 has been withdrawn, and a satisfactory explanation has been provided. To ask the Scottish Government what its response is to the House of Lords Constitution Committee report proposals for the devolution of further powers to Scotland. The Scottish Government agrees with the committee that the proposed Scotland bill should receive detailed scrutiny when it is introduced after the UK election. The bill and the accompanying fiscal framework will need to be scrutinised carefully in this Parliament to ensure that it reflects the substance and the spirit of the Smith commission proposals. The Scottish Government has suggested changes to the draft clauses across a range of areas to bring them closer to the intentions of the Smith report. I hope that the new UK Government will work with us to make those improvements and to ensure that the additional powers are transferred to the Scottish Parliament as soon as possible. I thank the Deputy First Minister for the answer, but I wonder whether he would agree with me that it is an outrage for a group of unelected peers to respond, as they have, to the prospect of this Parliament obtaining increased powers. Does he also agree with me that it is high time that the democratic anomaly that is the House of Lords was addressed by abolition? I agree with Mr Day in relation to the abolition of the House of Lords, in relation to the report of the select committee that has come forward. The report expresses a number of different issues, some of which are worthy of being taken further forward and considered. I do not really think that some of them require much attention, but in the course of the parliamentary scrutiny, the Parliament will have the opportunity to consider any relevant remarks that come from this committee and how they may have an effect on the formulation of the legislation involved. To the great disappointment of Mr Day, I am still around, Deputy Presiding Officer, on occupying a place in another House. The Lord's Committee noted that Scotland and the UK have been in a period of constitutional upheaval for 15 years, and that is unprecedented in mature Western democracies. Can the cabinet secretary commit that once the new powers are in effect, the Scottish Government will end constitutional wrangling and give the new powers a chance to work effectively for the people of Scotland? There is a fundamental point among all that we have gone through in the aftermath of the referendum since September. First, where there is a need and an obligation in the political process for the Government to co-operate to implement particular changes that arise, the Government co-operates to the full. For example, in relation to the formulation of the approach on land and buildings transaction tax, and on the landfill tax, and on various other provisions that arose out of the Kalman commission, which, if my memory serves me right, Ms Goldie found it but did not serve on it. The Government has taken forward all those provisions in a spirit of effective co-operation. In fact, we have got to that point in relation to the land and buildings transaction tax, because the Exchequer Secretary and I were able to exchange correspondence just the other day there, which enabled the UK Government to switch off stamp duty land tax in Scotland, and for me to switch on land and buildings transaction tax, perfectly orderly arrangements to make that happen. Wherever that is required, this Government will undertake that activity. However, Ms Goldie must appreciate it, and I would have thought that this is something that she does. Those of us on those benches have a different view of the constitutional arrangements that should be appropriate for Scotland. Those are appropriately held, deeply held, sincerely held views about the arrangements of our country, just as deeply and sincerely held, as I know Ms Goldie's are, about her position. We simply have to leave it to the people of our country to decide what should be our future, and we are happy to enable them to do exactly that. To ask the Scottish Government what its response is to the Committee on Climate Change's expert statement that further actions are required if the 2020 renewable heat target is to be met. We welcome the Committee on Climate Change's consideration of progress and action in regard to the emissions reductions in Scotland. We are making progress on the target for 11 per cent on non-electrical heat demand from renewables by 2020, but there is no doubt that it will be challenging to meet, particularly in the context where we do not have the full range of drivers within our competence. For example, the renewable heat incentive is a UK Government scheme. In order to focus and drive pace of change that we published in 2014, our draft heat generation policy statement has a particular focus on encouraging uptake of renewable heat technology and maximising potential for existing and renewable heat sources, and we expect the final statement to be published soon. I thank the minister for that response. Will the Scottish Government publish an update on progress towards the expert commission's 18 recommendations? Will the specific points raised by the climate change committee's report be actioned urgently? For example, there are many things that can be done in the Scottish Government's competence such as the delivery of a heat networks delivery unit and requiring consideration of district heating in all new developments. If the minister does not feel able to confirm those issues today, would he ask the energy minister if he would be prepared to meet with me to discuss taking these issues forward? I thank the member for the way she has put the question. I could go through some of the issues that she has raised, but I recognise the member's long-standing and in-depth commitment to the area, so it is probably best if we arrange for a meeting with the minister and the member. To ask the Scottish Government what it is doing to grow the economy in Mid Scotland and Fife. The Scottish Government is committed to boosting economic growth and tackling inequality across Scotland. In Mid Scotland and Fife, we continue to support economic growth with substantial investment in infrastructure and business support. For example, 113 businesses across Mid Scotland and Fife have benefited from over £55 million of regional selective assistance awards since 2007, creating or safeguarding 5,603 jobs. I thank the cabinet secretary for that answer. Does he agree that, for the long-term sustainable growth of the Scottish economy, we must shift the balance of investment towards manufacturing? Can he provide me with more detail of the progress being made to bring such investment for strategic employment sites in Fife, including the Rosyth Waterfront area, the Motorola site in Dunferman and the Energy Park in Meadow? On the fundamental point that Jane Baxter raises, I agree entirely that the Government's economic strategy is focused on strengthening innovation, on encouraging inclusive growth of supporting investment in particular companies and the wider infrastructure of the country, and on encouraging companies to be more actively involved in the wider international business activity. On the particular sites that Jane Baxter referred to, additional freight capacity on the fourth was identified as a national development to assist in ensuring that proposals for the development of the Rosyth facility are delivered, and that remains a central part of the national planning framework. The Scottish Enterprise has been heavily involved in investment in the methyl site, and we will continue to encourage and support economic development in that site. There are a number of very focused initiatives that the Government takes to ensure that we have sites available for particular development and to encourage manufacturing companies to either locate or expand and grow in those areas. The final point is that the Scottish Manufacturing Advisory Service, which is available through the work of Scottish Enterprise, is available to companies in the locality, and we would encourage companies in the Fife area to take up those opportunities. Can the cabinet secretary advise what are the potential benefits to the mid-Scotland and Fife economy of the University of St Andrews renewable energy project at Cardbridge? That is one of a number of energy projects that are taken forward. There are a number, Jane Baxter referred to one in relation to the energy park at methyl. We encourage and support the development of renewable energy projects throughout the country. I am sure that the work that is under way at St Andrews will be of great benefit in expanding and developing knowledge and the approach to project development in those areas. One proposal from the Scottish Government that will have an impact on the mid-Scotland and Fife economy is the plan to reintroduce business rates on sporting interests. Can the cabinet secretary tell us if those rates will be charged on all agricultural land to which sporting rights are attached? The Government is still engaged in the detailed consultation around all of those questions. When we set out our further proposals on land reform, the particular issue that Mr Fraser raises will be dealt with in that consultation. The Government believes that the anomaly that is created by the absence of business rates in sporting estates is something that should be closed as part of the land reform process, and we will set out the detail in due course. Thank you, Deputy Presiding Officer, to ask the Scottish Government what steps it is taking to help to regenerate the economy of Dumfries on Galloway. The Scottish Government is committed to supporting sustainable economic growth and regeneration in Dumfries in Galloway. We support the work of the South of Scotland Alliance, which is driving forward the South of Scotland rural regional economic development programme. Projects in that programme will encourage economic activity, promote growth, increase inward investment and protect and create employment across Dumfries in Galloway. Great for that answer. I can think of no greater stimulus to the economy of my constituency than the regeneration of Stranra Harbour waterfront, a large area of prominent land that has become increasingly derelict since Stenna, the ferry company, moved to its new port facility north of Cairn Rhyon. I am glad that the cabinet secretary mentioned the South of Scotland Alliance. It came and gave us a briefing here just two weeks ago, and it highlighted the importance of this development as one of its top priorities. There are reportedly two bids being considered for the redevelopment of that site, but no outcome has been forthcoming, despite one being promised for some time. So may I ask what steps the cabinet secretary might be able to take to try to move this process forward? Would he consider the creation of a special enterprise zone around Stranra if no bids materialise? I discussed this issue when I last met the South of Scotland Alliance in Dumfries, which was several weeks ago. The local authority, the Fries and Galloway Council, has the lead role in relation to the regeneration of the Stranra Harbour waterfront, so the consideration of the bids to which Mr Ferguson refers is a matter entirely for the local authority. I am certainly not sighted on any of the detail about that bidding process, nor should I be for that matter. What I said to the South of Scotland Alliance is that I could see the strategic significance of the Stranra Harbour waterfront. Therefore, once they were further through their process in relation to considering the bids, I would be happy to discuss further with the local authority and the South of Scotland Alliance how we might bring together different interests and parties and players to try to tackle what I recognise as a significant issue for the Stranra area in Mr Ferguson's constituency. The ball at this stage is in the court of the local authority, but I do not say that to say that the Government has nothing to do with it. The Government will happily engage constructively with the council on this point. I encourage the South of Scotland Alliance to formulate an economic agenda of how it wishes to advance key projects across the whole of the area. It has responded to that constructively. I have committed to meeting the South of Scotland Alliance twice a year to ensure that Government agencies are engaging to my satisfaction with the agenda that the South of Scotland Alliance has created. I welcome the leadership that has been put in place by both local authorities, and I am pledged to ensure that the Government engages constructively in any way that we can to help to deliver the agenda. I attended the meeting with the South of Scotland Alliance, and specifically they mentioned the absence of financial support from central Government. Amongst the issues that the cabinet secretary will consider, we also consider the very helpful use of Scottish Government finance to support the initiative. It really depends on what emerges as a project. There will be a multiplicity of different issues that the Government would have to consider, at least if, for example, a private developer came forward to develop Mr Nall's waterfront, there would undoubtedly be issues of state aid that the Government would have to consider, which are not issues that we can ignore. As I made clear in my answer to Mr Ferguson, the Government is very willing to engage in substantive dialogue with the South of Scotland Alliance on those projects. I asked the Alliance to come up with a substantive agenda that would advance those questions. They have now done that, and we will maintain that discussion with my six-monthly meetings with them to consider what are the most effective ways in which the Government can assist in any way that we can. To ask the Scottish Government what its response is to the post-budget briefing by the Institute for Fiscal Studies, which finds that the poorest have seen the biggest proportionate losses as a result of the UK Government's tax and benefit changes. The Institute for Fiscal Studies has indicated that, looking at the tax and benefit changes implemented by the current UK Government, the poorest has suffered the biggest proportionate losses. Clearly, the United Kingdom Government's austerity agenda and welfare cuts have significantly reduced incomes for some of our poorest households and are undermining our efforts to tackle poverty. We are doing what we can to help those affected. We are investing around £296 million from 2013-14 to 2015-16 to limit the damage of the cuts and changes being introduced. We cannot fully mitigate all the effects of welfare changes, but we will continue to make the argument for a fairer welfare system. It is clear from the IFS analysis that not only is austerity not working but that our alternative of modest real-term spending increases in each year of the next Parliament instead of cuts would see the deficit and debt falls as a share of our national income, freeing up billions of pounds to reinvest in our infrastructure, skills, public services and protecting our people. Does the minister agree with me that that just highlights the need for a vote for the SNP in a couple of weeks to offer the best opportunity to stand up for all the people of Scotland? What is clear from the current debate is that there are alternative approaches that can be taken to austerity. The Scottish Government believes that that is the case. We have long argued for that position. That issue is one on which people can use their votes effectively in the forthcoming general election. Very briefly, Jackie Baillie. We discovered at the start of this week that the SNP had signed up tutorial austerity plans for 2015-16. Given what James Dornan has said, why has the SNP joined with the Tories in continuing austerity? Does he agree with the IFS analysis that there is a £7.6 billion black hole in the Scottish budget with full fiscal autonomy? I really do not know what on earth Jackie Baillie is referring to about the start of the week. The Scottish Government has been absolutely crystal clear that we oppose austerity. Jackie Baillie would do us all a service if she and the Labour Party would take a different tack to the one that they have taken and would support an approach of investment in the economy to deliver the economic growth that I thought Jackie Baillie would be interested in delivering to create new hope and new opportunities for people in our country. However, as usual, Jackie Baillie is continuing her partnership with the Conservatives, which saw her go through the last couple of years hand in hand better together, and it is going through the election campaign into the bargain. To ask the Scottish Government what the impact on the Scottish economy would be of the UK leaving the EU. The Scottish Government firmly believes that exiting the EU would have a deeply damaging impact on Scotland's economy. Membership of the EU provides us to access with the largest single market in the world. Over 500 million potential customers in 2013, the EU was the destination for 46 per cent of Scottish exports, worth almost £13 billion. On top of that, over 300,000 Scottish jobs depend on those EU exports. That is why the Scottish Government will continue to make the case for Scotland's membership of the EU going forward, as set out in our action plan for EU engagement, launched last Friday, along with our booklet on the benefits of EU membership. The minister will be aware that there are many individuals from other parts of the EU who live and work in Scotland and whose status may be affected by a decision for the UK to withdraw from the EU. I would be grateful if the minister could outline what constitutional measures could be put in place to prevent Scotland being taken out of the EU against the wishes of our people. The member highlights a very important point, particularly in the run-up to the general election. We know that anti-EU migration rhetoric has been hyped up, and many parties have got behind that. I think that all of us would recognise that EU migrants in Scotland have played a very positive role. Research from UCL has shown that between 2001 and 2011 they contributed £20 billion to the economy. Of course, Scots, who are on the continent, as the member says, is also making a very positive contribution wherever they are. The UK exit from the EU would have a drastic and catastrophic consequence on an economy. That is why the First Minister herself has made clear that we believe in a double lock on membership, with an exit only possible if a majority of people in all four constituent parts of the UK vote to leave. Question 13, Malcolm Chisholm. To ask the Scottish Government whether it supports more progressive taxation for those on the very highest incomes and those with the most expensive property. Cabinet Secretary. Presiding Officer, the Scottish Government has set out its approach to taxation, which is based on the four principles set out by Adam Smith, certainty, convenience, efficiency of collection and that taxes should be proportionate to the ability to pay. The Government placed fairness, equity and the ability to pay at the very heart of the first decisions that we have taken on national tax rates. We have also set up the commission on local tax reform, whose remit will enable it to show how progressive the alternative tax systems that it identifies can be and the significance of any changes to both taxpayers and the funding of public services. Malcolm Chisholm. I welcome the fact that the cabinet secretary has played catch-up with Labour on the 50p tax rate for those with the highest incomes, contradicting what Alex Salmond said on the Andrew Martial 10 days ago. Will he go further now and also support a mansion tax in order to provide extra money for the NHS, a bankers bonus tax in order to provide a job and training guarantee and changes to the pension tax relief for the richest pensioners in order to provide more opportunities for young people? I think that the point that I would say to Mr Chisholm is that I think that we should be judged on the actions that we take on these questions. The actions that we have taken on these questions is that when we had the opportunity to set particular tax rates, the Scottish Government has used the first available opportunity on land and buildings transaction tax to essentially do exactly what Mr Chisholm is talking about in his question of ensuring that on property transactions those who are living on the highest value properties pay more. Under the system that I have put in place, which Mr Chisholm's party voted for, 90 per cent of taxpayers are paying the same or less under the system and 10 per cent are paying more, and those are the people who are living in the higher value property. I would have thought that that would have been a reasonable reassurance to Mr Chisholm about the direction of travel, but, of course, when it came to deciding on the issue about the 50-pence tax rate in the House of Commons, my colleague Stuart Hosey, the member for Dint, or the member apartment in the last House of Commons for Dint East, moved that the 50p tax rate be restored, but Mr Chisholm's colleagues for some unbelievable reason couldn't find it in themselves to vote in favour of such a proposition. I think the only... I'm told that this is about the Bain principle, that no proposal that comes forward from the Scottish National Party should be supported. That seems to me to be a rather short-sighted action by the Labour Party, but we look forward to utilising the influence that we have in the House of Commons to deliver fairness and prosperity in the aftermath of the United Kingdom general election, and we will bring those values to bear in any situation beyond the UK election. I wonder if the cabinet secretary agrees that Westminster's 2 per cent NIC rate for high earners is regressive rather than progressive. The Scottish Government believes that taxation should, in all circumstances, be related to the ability to pay. Our belief is that important decisions about the management of the tax arrangements can be best served and best undertaken by the decision making that we undertake in this Parliament and where we can take the opportunity, as we have done, on land and buildings transaction tax to deploy the values of fairness and equity, which have been at the heart of our decision making. Question 14 has not been lodged and a satisfactory explanation has been provided. Question 15, Christian Allard. To ask the Scottish Government what it is doing to suppose the oil and gas industry. The Scottish Government is using all of the levers under our control to support the oil and gas industry. At this time, the energy minister, Fergus Ewing, is in the United States undertaking meetings and discussions with various interested parties in the North Sea oil and gas sector. There is an extensive network of support for the oil and gas industry, which is delivered through Scottish Enterprise, Hearnslands Enterprise, Scottish Development and National Skills Development Scotland and the Scottish Funding Council. We have established the energy jobs task force, which is now met three times, and has recently published its action plan, setting out some of the key measures that have been taken forward with the backing and support of key industry leaders. Christian Allard. I thank the Deputy First Minister for his answer. Will he agree with me that the U-turn from the chancellor, George Osborne, on the taxation of the oil and gas industry was an admission, but his policy for the North Sea has been wrong and the post scholarship by the UK Government has had a detrimental impact on our oil and gas sector? Will he agree that he has been in another case of too little, too late and that many job losses could have been avoided? Cabinet Secretary. I want to say first of all that, as the Government has made clear, that we welcome the steps that were taken by the United Kingdom Government in the budget statement on 18 March. The reduction of the supplementary charge, the introduction of the base and wide investment allowance, the reduction of petroleum revenue tax and the modest investment in exploration were all welcome. I think that what they indicate is that the United Kingdom Government has realised that its stewardship of the North Sea oil and gas regime on taxation purposes had to be dramatically revised as a consequence of the results that had been generated from the significant increase in particularly the supplementary charge that had taken place since the UK Government came to office. Add to that the fact that a new oil and gas authority has been put in place, changing the regulatory regime, demonstrates that, in the course of the past 18 months, the UK has changed fundamentally both the fiscal regime and the regulatory regime, which demonstrates to me that there is acknowledgement that the UK has ill-served the North Sea oil and gas sector with the way in which it has taken forward its policy agenda. The changes that have been made in the budget are welcome, and I do hope that they are taken as a signal by the oil and gas industry that there is an opportunity to invest in the North Sea sector, and that is taken up by interested parties. I am afraid that that concludes questions, and I apologise to the members that we have not reached. We turn to the next item of business, which is a debate on motion number 12857, in the name of—