Question
Christopher has investments in two passive activities. Activity A, which was acquired three years ago, has a beginning of the year remaining basis and at-risk
Christopher has investments in two passive activities. Activity A, which was acquired three years ago, has a beginning of the year remaining basis and at-risk balance of a positive $8,000 and no unused passive loss accumulation. Christopher's share of the income produced by Activity A in 2020 is $60,000. Activity B, which was acquired last year, has a beginning of the year remaining basis and at-risk balance of a positive $45,000 and balance of accumulated previously unused passive losses of $40,000. Christopher's share of the loss produced by Activity B in 2020 is $100,000.
- How much income or loss from Activity A and B reaches Christophers 2020 federal income tax return?
- How much, if any, accumulated unused passive loss gets trapped by each of the basis, at risk and passive activity rules, applied as of the end of 2020?
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