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 $192,000 tax basis in his LLC interest that includes his $176,000 share of Sierra Vistas general liabilities. By the end of the year, Farells share of Sierra Vistas general liabilities have increased to $192,000. 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 $223,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $12,000. Farell is single and has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.)

rev: 11_15_2021_QC_CS-285604

Problem 20-76 Part b (Algo)

Assume Farells Riverwoods K-1 indicates passive income of $27,000.

1. b-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1.

2. b-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations.

3. b-1 Deductible loss	16000
   b-2 Losses suspended by tax basis limitation	?
   b-3 Losses suspended by at risk-limitation	192000
   b-4 Losses suspended by passive activity loss limitation	?