Question

Rhonda owns an interest in a limited partnership (a passive activity), and her share of the...

Rhonda owns an interest in a limited partnership (a passive activity), and her share of the partnership's loss is $26,000. Her tax basis in the partnership is $27,000, and her at-risk amount is $21,000. In addition to the loss from the partnership, Rhonda has $60,000 of income from her salary, $2,000 of interest from corporate bonds, and $29,000 of income from another limited partnership (a passive activity). What amount of the partnership loss may Rhonda deduct in the current year?

Multiple Choice

  • $21,000, which is her at-rist basis

  • $29,000, which is the amount of her passive income

  • $26,000 because her passive income exceeds her passive loss

  • $27,000, which is her tax basis

Business   Accounting   
0 0
Add a commentTranscribed image text
Next >

Homework Answers

Answer #1

Ans:

As per passive activity loss rules, loss from passive activities cannot be deducted from ordinary income. Passive activities loss can be fully deducted from other passive activity income. however if loss exceeds the other passive activity income, it can be carried forward.

So in our case other passive activity income is higher than passive activity loss. So entire $26,000 can be deducted.

So correct answer is option C.

$26,000 because her passive income exceeds her passive loss.

For any query please ask in comment box, we are happy to help you. Also please don't forget to provide your valuable feedback. Thanks!

0 0
Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
1. Rubio recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount...
1. Rubio recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is $15,000. In addition, Rubio’s share of the limited partnership loss for the year is $22,000, his share of income from a different limited partnership was $6,000, and he had $40,000 in wage income and $10,000 in long-term capital gains. How much of Rubio’s $22,000 loss from the limited partnership can he deduct in the current year considering all limitations? 2. Anwar owns a...
Lucy sells her partnership interest, a passive activity, with an adjusted basis of $394,000 for $433,400....
Lucy sells her partnership interest, a passive activity, with an adjusted basis of $394,000 for $433,400. In addition, she has current and suspended losses of $59,100 associated with the partnership and has no other passive activities. Her total gain is $.............. and her deductible loss is $............ Lucy's deductible loss is offset against .........................
Eve purchases a 20% partnership interest but does not participate in the partnership’s business. Eve owns...
Eve purchases a 20% partnership interest but does not participate in the partnership’s business. Eve owns no other passive investments. Her Section 704(d) basis in the partnership = $80,000. Of this amount, $70,000 is at risk. Eve’s distributive share of the partnership’s loss for the current year =$60,000. Eve can deduct: a. $60,000 c. $70,000 b. $80,000 d. $0
Larry recently invested $31,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is...
Larry recently invested $31,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is also $31,000. In addition, Larry’s share of the limited partnership loss for the year is $2,550, his share of income from a different limited partnership is $1,220, and he has $4,100 of dividend income from the stock he owns. How much of Larry’s $2,550 loss from the limited partnership can he deduct in the current year? Deductible loss?
Ms. Turney owns a one-half interest in an apartment complex, which is her only passive activity....
Ms. Turney owns a one-half interest in an apartment complex, which is her only passive activity. The complex operated at a $53,000 loss this year. In addition to her share of this loss, Ms. Turney had the following income items: Salary $ 59,000 Interest and dividends 4,400 Compute her AGI. Compute her AGI if her salary was $113,400 rather than $59,000. Compute her AGI if her salary was $168,250 rather than $59,000.
20. Larry recently invested $28,500 (tax basis) in purchasing a limited partnership interest. His at-risk amount...
20. Larry recently invested $28,500 (tax basis) in purchasing a limited partnership interest. His at-risk amount is also $28,500. In addition, Larry’s share of the limited partnership loss for the year is $2,425, his share of income from a different limited partnership is $1,170, and he has $3,850 of dividend income from the stock he owns. How much of Larry’s $2,425 loss from the limited partnership can he deduct in the current year?
Alfonso began the year with a tax basis in his partnership interest of $30,000. His share...
Alfonso began the year with a tax basis in his partnership interest of $30,000. His share of partnership debt at the beginning and end of the year consists of $4,000 of recourse debt and $6,000 of nonrecourse debt. During the year, he was allocated $40,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership and he has $1,000 of passive income from other sources. a. How much of Alfonso’s loss limited by his tax basis? b....
Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity...
Nell earns $50,000 salary income in the current year. In addition, Nell sells a passive activity with an adjusted basis of $45,000 for $155,000 in the current year. Suspended losses attributable to this property total $45,000. Nell owns another separate passive activity which has $10,000 passive loss for the current year and $80,000 suspended passive losses from prior years. Nell will report the following on her current year income tax return (as a result of just these transactions): a. $$50,000...
Nell earns $50,000 salary income in the current year.  In addition, Nell sells a passive activity with...
Nell earns $50,000 salary income in the current year.  In addition, Nell sells a passive activity with an adjusted basis of $45,000 for $155,000 in the current year. Suspended losses attributable to this property total $45,000. Nell owns another separate passive activity which has $10,000 passive loss for the current year and $80,000 suspended passive losses from prior years.  Nell will report the following on her current year income tax return (as a result of just these transactions): a. $$50,000 salary income...
Eduardo recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is...
Eduardo recently invested $20,000 (tax basis) in purchasing a limited partnership interest. His at-risk amount is $15,000. In addition, Eduardo’s share of the limited partnership loss for the year is $22,000, his share of income from a different limited partnership was $5,000, and he had $40,000 in wage income and $10,000 in long-term capital gains. a. How much of Eduardo’s $22,000 loss can he deduct considering only the tax basis limitation? b. How much of the loss from part a....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT