Del is a partner in a partnership that operates an Alpaca farm, along with his partners, Mel, Darnell, Jamel, and Glenn. By December, Del had spent 90 hours participating in the farm, and the other partners had spent 80. Due to expenses arising from an outbreak of mad Alpaca disease, Del's farm operated at a significant loss this year. 

What tax advice would you give Del and why? 

 

Now, ignoring your answer to the last question, assume that Del's Alpaca farm is a passive activity. Del also operates a sock factory across town. It is an LLC with members Del, Mel, Darnell, Jamel, and Jeff. The factory is very profitable, producing several lines of socks, with the Alpaca farm as the sole supplier of wool for its wool sock line. Del's Alpaca farm earns some revenue from tourism, but it sells all of it's wool to the sock factory. Del spends 550 hours per year fulfilling his management responsibilities at the sock factory. 

What tax advice would you give Del and why

 

Rajit purchased shares in Zoom, and his basis is $55,000. The market value of the shares is currently $38,000. Rajit still firmly believes that the shares will probably recover quickly and are definitely a good investment long term, and he wants to remain long in the Zoom stock. However, he would also like to harvest the losses now to offset his other income this year. 

What is the best way for him to achieve these objectives?

Answer rating: 100% (QA)

Tax Advice for Del regarding Alpaca Farm Given that Dels Alpaca farm is operating at a significant loss Del may want to consider the passive activity ... View the full answer