Problem $4-14$

Passive Loss Limitations $($LO $4\mathrm{.}8)$

Walter, a single taxpayer, purchased a limited partnership interest in a tax shelter in $1996.$ He also acquired a rental house in $2023,$ which he actively manages. During $2023,$

Walter's share of the partnership's losses was $$30,000,$ and his rental house generated $$20,000$ in losses. Walter's modified adjusted gross income before passive losses is

$$120,000.$

If an amount is zero, enter $"0."$

a$.$ Calculate the amount of Walter's allowable loss for rental house activities for $2023.$

$

b$.$ Calculate the amount of Walter's allowable loss for the partnership activities for $2023.$

$

c$.$ What may be done with the unused losses, if anything?

The unused losses may be carried

to reduce

income in those years.

back $2$ tax years

forward to future tax years until used

back $2.$tax years then forward until used