Question

Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $65,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $31,000. In year 1, Beau Geste incurs a loss of $227,100 and does not make any distributions to the partners. In year 1, Molly's AGI (excluding any income or loss from Beau Geste) is $62,000. This includes $17,300 of passive income from other passive activities. In year 2, Beau Geste earns income of $38,200. In addition, Molly contributes an additional $18,640 to Beau Geste during year 2. Molly's AGI in year 2 is $65,000 (excluding any income or loss from Beau Geste). This amount includes $14,660 in income from her other passive investments.

a. Based on the above information, determine the following amounts:

Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $65,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $31,000. In year 1, Beau Geste incurs a loss of $227,100 and does not make any distributions to the partners.

• In year 1, Molly's AGI (excluding any income or loss from Beau Geste) is $62,000. This includes $17,300 of passive income from other passive activities.
• In year 2, Beau Geste earns income of $38,200. In addition, Molly contributes an additional $18,640 to Beau Geste during year 2. Molly's AGI in year 2 is $65,000 (excluding any income or loss from Beau Geste). This amount includes $14,660 in income from her other passive investments.
• a1:

  Initial year 1 amount:	$31,000selected answer correct
  Allowed loss:	(31,000)selected answer correct
  End of year 1 at-risk amount	$0selected answer correct
  Contribution for year 2	$18,640selected answer correct
  BG Income	11,460selected answer correct
  Allowed loss:	(37,130)selected answer correct
  End of year 2 at-risk amount	$(7,030)selected answer correct

• A2:

  Year	Total Loss	At-Risk Allowed	At-Risk Disallowed
  1	$68,130selected answer correct	$31,000selected answer correct	$37,130selected answer correct
  2	37,130selected answer correct	37,130selected answer correct	$0selected answer correct

• a3:

Year	At-Risk Allowed	Passive Activity Loss Allowed	Passive Activity Loss Disallowed
1	$31,000	$17,300	$13,700
2		26,120

Please fill inn the blanks

Answer 1

A-1)

Particulars	Amount($)
Initial Year 1 Amount	31000
Allowed Loss	(31000)
End of Year 1 at Risk Amount	-
Contribution for Year 2 (A)	18640
BG Income (B) ($38200*30*)	11460
Allowed Loss (C) (($227100*30%)-$31000)	(37130)
End of Year 2 at Risk Amount (A+B-C)	7030

A-2)

Year	Total Loss (A)	At Risk Allowed (B)	At Risk Disallowed (A-B)
1	($227100*30%) = $68130	$31000	$37130
2	$37130	$37130	$0

A-3)

Year	At Risk Allowed (A)	Passive Activity Loss Allowed (B)	Passive Activity Loss Disallowed (A-B)
1	$31000	$17300	$13700
2	($37130+$13700)= $50830	(($38200*30*)+$14660)= $26120	$24710

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