$1$

Port $4$ of $4$

$3\mathrm{.}44$

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Problem $20-76($LO $20-6)($Algo$)$

$[$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 $$259,000$ tax basis in his LLC interest that includes his $$244,000$ 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 $$259,000.$ Because of the time he spends in other endeavors, Farell does not materially participate in Sierra Vista. His share of the Sierra Vista losses for year $1$ is $$294,000.$ As a partner in the Riverwoods Partnership, he also has year $1,$ Schedule K$-1$ passive income of $$13,000.$ Farell is single and has no other sources of business income or loss.

Note: Leave no answer blank. Enter zero if applicable.

Problem $20-76$ Part d $($Algo$)$

d$.$ Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $$271,000$ loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year $1.$

Loss deductible