12-19 Passive-Activity Limitations. Mis a successful banker. Two years ago, M's 27-year- old son, J. asked his dad to become his partner in opening a sporting goods store. M agreed and contributed $50,000 for a 50% interest in the partnership. J operates the store on his own, receiving little advice from his father. Information regarding M's financial activities reveals the following for the past two years: Interest Income Year Partnership Income (Loss) Salary 2019. ............ $100,000 $20,000 $(40,000) 2020 ......... 100,000 20,000 12,000 All parties are cash basis, calendar year taxpayers. Answer the following questions, a. How did M's investment in the partnership affect his AGI in 2019? b. How did M's investment in the partnership affect his AGI in 2020? c. Would your answer to (b) change if the partnership had a loss in 2020 and the income shown was from M's interest as a limited partner in a real es tate venture? d. On January 1, 2021, M sold his interest in the partnership to his son lo $40,000 gain. What effect? 12-20 Passive-Activity limitatin