Five years ago, Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1,

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Five years ago, Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2021, his amount at risk in the activity was $30,000. His shares of the income and losses were as follows:

Year 2021 2022 2023 Income (Loss) ($40,000) (30,000) 50,000

Gerald holds no suspended at-risk or passive activity losses at the beginning of 2021. How much can Gerald deduct in 2021 and 2022? What is his taxable income from the activity in 2023? Consider the at-risk rules as well as the passive activity loss rules. 

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South Western Federal Taxation 2023 Essentials Of Taxation Individuals And Business Entities

ISBN: 9780357720103

26th Edition

Authors: Annette Nellen, Andrew D. Cuccia, Mark Persellin, James C. Young

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