Danni is a single 30 percent owner of Kolt (a business entity). In the current year, Kolt reported a $1,000,000 business loss. Answer the following questions associated with each of the following alternative scenarios: (Leave no answer blank. Enter zero if applicable.)

Problem 15-59 Part a (Static)

a. Kolt is organized as a C corporation and Danni works 20 hours a week as an employee for Kolt. Danni has a $200,000 basis in her Kolt stock. How much of Kolts loss is Danni allowed to deduct this year against her other income? $0

Allowable deduction for loss

$0

b. Kolt is organized as an LLC taxed as a partnership. Thirty percent of Kolts loss is allocated to Danni. Danni works 20 hours a week on Kolt business activities (she is not considered to be a passive investor in Kolt). Danni has a $400,000 basis in her Kolt ownership interest, and she also has a $400,000 at-risk amount in her investment in Kolt. Danni does not report income or loss from any other business activity investments. How much of the $300,000 loss allocated to her from Kolt is Danni allowed to deduct this year?

Allowable deduction for loss

?

c. Kolt is organized as an LLC taxed as a partnership. Thirty percent of Kolts loss is allocated to Danni. Danni is not involved in Kolt business activities. Consequently, she is considered to be a passive investor in Kolt. Danni has a $400,000 basis in her Kolt ownership interest, and she also has a $400,000 at-risk amount in her investment in Kolt. Danni does not report income or loss from any other business activity investments. How much of the $300,000 loss allocated to her from Kolt is Danni allowed to deduct this year?

Allowable deduction for loss

$0