A number of years ago, Lee acquired a 20 interest in the BlueSky Partnership for $60,000 The partnership was profitable through 2014, and Lee 's amount at risk in the partnership interest was $120,000 at the beginning of 2015 BlueSky incurred a loss of $400,000 in 2015 and reported income of $200,0...

Lees share of BlueSkys loss in 2015 is 80000 400000 20 and the entire loss is suspended ...

A number of years ago, Lee acquired a 20% interest in the BlueSky Partnership for $60,000. The

Question:

A number of years ago, Lee acquired a 20% interest in the BlueSky for $60,000. The was profitable through 2014, and Lee's amount at risk in the interest was $120,000 at the beginning of 2015. BlueSky incurred a loss of $400,000 in 2015 and reported income of $200,000 in 2016. Assuming that Lee is not a material participant, how much of his loss from BlueSky is deductible in 2015 and 2016? Consider the at-risk and passive loss rules, and assume Lee owns no other passive investments.
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...