Question
Five years ago Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2016, his amount at risk in the activity
Five years ago Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2016, his amount at risk in the activity was $30,000. His shares of the income and losses were as follows:
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Gerald holds no suspended at-risk or passive activity losses at the beginning of 2016.
If an answer is zero, enter "0".
a. If losses were limited only by the at-risk rules, how much can Gerald deduct in 2016 and 2017?
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b. Refer to the information in part (a) above. Assuming Gerald has $50,000 income in 2018, what is his taxable income in 2018 under at-risk rules? $
c. If losses were limited by the at-risk and passive activity loss rules, how much would Gerald be able to deduct in 2016 and 2017?
2016: $
2017: $
d. Assuming Gerald has $50,000 income in 2018, (and considering both at-risk and passive activity loss rules), what is the amount of Gerald's suspended passive activity losses at the end of 2018 under the at-risk rules and under the passive activity loss rules? Under the at-risk rules: $ Under the passive activity loss rules: $
At the end of 2018, what is the amount of Gerald's adjusted basis in the activity? $
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