Question

Larry recently invested $24,844 (tax basis) in purchasing a limited partnership interest in which he will have no management rights in the company. His at-risk amount is also $24,844. In addition, Larry’s share of the limited partnership loss for the year is $4,997, his share of income from a different limited partnership was $5,384, and he has $7,904 of dividend income from the stock he owns. What is the amount of adjusted gross income these transactions will generate?

Answer #1

Computation of Adjusted Gross
Income of Mr Larry |
||

Gross
Income |
||

Income from a different partnership | $ 5,384 | |

Less Loss from another partnership | $ 4,997 | |

Net income for the year | $ 387 | |

Income from dividend | $ 7,904 | |

Adjusted Gross Income for the
year |
$ 8,291 | |

Notes: Lary's Tax basis is $24,844 and his at risk amount is also $24,844. Therefore the basis and at risk hurdles do not apply. As he has surplus income, he can adjust the loss of $4997 from his income of $5384 and add the dividend income to arrive at the Adjusted Gross Income of $ 8291 | ||

Answer; The amount of Adjusted
Gross Incomes these transaction generated is $
8291 |

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