Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number...

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Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a developer. On January 1, year 1, Farell has a $152,000 tax basis in his LLC interest that includes his $135,000 share of Sierra Vista's general debt obligations. By the end of the year, Farell's share of Sierra Vista's general debt obligations has increased to $152,000. Because of the time he spends in other endeavors, Farell does not materially participate in Sierra Vista. His share of the Sierra Vista losses for year 1 is $189,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $14,000. Farell is single and has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.) a-1. Determine how much of the Sierra Vista loss Farell will currently be able to deduct on his tax return for year 1. a-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. Answer is complete but not entirely correct. a- Deductible loss $ 14,000 1. a- Losses suspended by tax basis limitation 35,000 2. Losses suspended by at-risk limitation 152,000 Losses suspended by passive activity loss limitation 14,000 Assume Farell's Riverwoods K-1 indicates passive income of $27,000. b-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1. b-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. Answer is complete but not entirely correct. b- Deductible loss $ 14,000 1. b- 2. Losses suspended by tax basis limitation 35,000 Losses suspended by at-risk limitation 152,000 Losses suspended by passive activity loss limitation 27,000 Assume Farell is deemed to be an active participant in Sierra Vista. c-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1. c-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. OAnswer is complete but not entirely correct. C- Deductible loss $ 1. C- Losses suspended by tax basis limitation $ 14,000 2. Losses suspended by at-risk limitation Losses suspended by passive activity loss limitation 2$ 14,000 $ 14,000 Assuming Farell is deemed to be an active participant in Sierra Vista and he has a $261,500 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1. X Answer is complete but not entirely correct. Loss deductible $ 109,500 Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a developer. On January 1, year 1, Farell has a $152,000 tax basis in his LLC interest that includes his $135,000 share of Sierra Vista's general debt obligations. By the end of the year, Farell's share of Sierra Vista's general debt obligations has increased to $152,000. Because of the time he spends in other endeavors, Farell does not materially participate in Sierra Vista. His share of the Sierra Vista losses for year 1 is $189,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $14,000. Farell is single and has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.) a-1. Determine how much of the Sierra Vista loss Farell will currently be able to deduct on his tax return for year 1. a-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. Answer is complete but not entirely correct. a- Deductible loss $ 14,000 1. a- Losses suspended by tax basis limitation 35,000 2. Losses suspended by at-risk limitation 152,000 Losses suspended by passive activity loss limitation 14,000 Assume Farell's Riverwoods K-1 indicates passive income of $27,000. b-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1. b-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. Answer is complete but not entirely correct. b- Deductible loss $ 14,000 1. b- 2. Losses suspended by tax basis limitation 35,000 Losses suspended by at-risk limitation 152,000 Losses suspended by passive activity loss limitation 27,000 Assume Farell is deemed to be an active participant in Sierra Vista. c-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1. c-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. OAnswer is complete but not entirely correct. C- Deductible loss $ 1. C- Losses suspended by tax basis limitation $ 14,000 2. Losses suspended by at-risk limitation Losses suspended by passive activity loss limitation 2$ 14,000 $ 14,000 Assuming Farell is deemed to be an active participant in Sierra Vista and he has a $261,500 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1. X Answer is complete but not entirely correct. Loss deductible $ 109,500

Answer rating: 100% (QA)

A1 Currently Farrell can deduct 5000 and will incur a loss of 10000 that is suspendable due to the tax basis limitation in addition to a 5000 loss that is suspendable due to the passive activity limit... View the full answer