Tobias is a 50% partner in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is $182,000, and his at-risk amount is $145,600. His share of losses from Solomon for the current year is $236,600, all of which is passive. Tobias owns another investment that produced $127,400 of passive activity income during the year. (Assume that Tobias is a single taxpayer, there were no distributions or changes in liabilities during the year, and the Solomon loss is Tobias's only loss for the year from any activity.) How much of Solomon's losses may Tobias deduct on his Form 1040? How much of the loss is suspended, and what Code provisions cause the suspensions? Applicable Provision $704(d) § 465 $469 Overall limitation At-risk limitation Passive loss limitation. Deductible Loss Suspended Loss
Tobias is a 50% partner in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is $182,000, and his at-risk amount is $145,600. His share of losses from Solomon for the current year is $236,600, all of which is passive. Tobias owns another investment that produced $127,400 of passive activity income during the year. (Assume that Tobias is a single taxpayer, there were no distributions or changes in liabilities during the year, and the Solomon loss is Tobias's only loss for the year from any activity.) How much of Solomon's losses may Tobias deduct on his Form 1040? How much of the loss is suspended, and what Code provisions cause the suspensions? Applicable Provision $704(d) § 465 $469 Overall limitation At-risk limitation Passive loss limitation. Deductible Loss Suspended Loss
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A25.
Transcribed Image Text:Tobias is a 50% partner in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is
$182,000, and his at-risk amount is $145,600. His share of losses from Solomon for the current year is $236,600, all of which is passive.
Tobias owns another investment that produced $127,400 of passive activity income during the year. (Assume that Tobias is a single
taxpayer, there were no distributions or changes in liabilities during the year, and the Solomon loss is Tobias's only loss for the year from
any activity.)
How much of Solomon's losses may Tobias deduct on his Form 1040? How much of the loss is suspended, and what Code provisions cause
the suspensions?
Applicable Provision
§ 704(d)
§ 465
§ 469
Overall limitation
At-risk limitation
Passive loss limitation
Therefore, Tobias can deduct $
Deductible Loss Suspended Loss
on his return in the current year.
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