Instructions:

Problem 3 Chrystal died owning an interest in a passive activity property. The property had an adjusted basis of $270,000, a fair market value of $284,000, and suspended losses of $25,000. What can be deducted on her final income tax return? Problem 4 Howard has a $76,000 loss from an investment in a partnership in which he does not participate. His basis in the interest is $70,000. a. How much of the loss is disallowed by the at-risk rules? b. How much of the loss is disallowed by the passive loss rules? Calculate the initial basis, allowed losses, and ending at-risk amounts. Explain how to treat a loss on a federal income tax return. o Calculate what can be deducted on a final income tax return Calculate the loss disallowed by at-risk rules and how much of the loss is disallowed by passive loss rules. Explain the tax effect in a specified scenario for the last year and the current year. Calculate itemized deductions for AMT purposes and identify the amount of the AMT adjustment. o