Required information [The following information applies to the questions displayed below] 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 $106,000 tax basis in his LLC interest that includes his $90,000 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 $106,000. 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 $141,000. 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 Note: Leave no answer blank. Enter zero if applicable. d. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $276,000 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1 Loss deductible
Required information [The following information applies to the questions displayed below] 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 $106,000 tax basis in his LLC interest that includes his $90,000 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 $106,000. 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 $141,000. 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 Note: Leave no answer blank. Enter zero if applicable. d. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $276,000 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1 Loss deductible
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 25P
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