Question
Five years ago, Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2018, 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, 2018, 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 2018.
If an answer is zero, enter "0".
A) If losses were limited only by the at-risk rules, how much can Gerald deduct in 2018 and 2019?
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B) Refer to the information in part (a) above. If losses were limited by the at-risk and the passive activity loss rules, how much would Gerald be able to deduct in 2018 and 2019?
Of the allowable at-risk loss for 2018, Gerald may deduct $______ in 2018 due to the passive loss rules and of the allowable at-risk loss from 2019, Gerald may deduct $______ in 2019 due to the passive loss rules.
C) Assuming Gerald has $50,000 income in 2020, (and considering both at-risk and passive activity loss rules), what is the amount of Gerald's suspended losses at the end of 2020?
- Suspended under the at-risk rules: $_____
- Suspended under the passive activity loss rules: $_____
What is his taxable income for 2020? $______ At the end of 2020, what is the amount of Gerald's adjusted basis in the activity? $______
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