Question
Chris is a 25% partner in Marble Masonry LLC, which does not invest in real estate. On January 1, Chris's adjusted basis for his LLC
Chris is a 25% partner in Marble Masonry LLC, which does not invest in real estate. On January 1, Chris's adjusted basis for his LLC interest is $500,000, and his at-risk amount is $450,000. His share of losses from Marble Masonry for the current year are $600,000, all of which is passive. Chris owns another investment that produced $150,000 of passive activity income during the year. (Assume Chris is a single taxpayer, there were no distributions or changes in liabilities during the year, and that the Marble Masonry loss is Chris's only loss for the year from any activity.) How much of Marble Masonry's losses may Chris deduct on his Form 1040?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started