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 $183,000 tax basis in his LLC Interest that includes his $172,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's share of Sierra Vista's general liabilities have increased to $183.000. 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 $212.000 As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other sources of business income or loss. Note: Leave no answer blank. Enter zero if applicable.
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 $183,000 tax basis in his LLC Interest that includes his $172,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's share of Sierra Vista's general liabilities have increased to $183.000. 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 $212.000 As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other sources of business income or loss. Note: Leave no answer blank. Enter zero if applicable.
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 4BCRQ
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Transcribed Image Text: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 $183,000 tax
basis in his LLC Interest that includes his $172,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's
share of Sierra Vista's general liabilities have increased to $183.000. 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 $212.000. As a partner
In the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other
sources of business income or loss.
Note: Leave no answer blank. Enter zero if applicable.
Required:
a-1. Determine how much of the Sierra Vista loss Farell will currently be able to deduct on his tax return for year 1
6-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations
a-1 Deductible loss
a-2 Losses suspended by tax basis limitation
a-2 Losses suspended by at-risk limitation
a-2. Losses suspended by passive activity loss limitation
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