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Mary owns a travel agency and made a Sec 183(e)(1) election. Mary took around the world trips in years 1 and 2 to improve her

Mary owns a travel agency and made a Sec 183(e)(1) election. Mary took around the world trips in years 1 and 2 to improve her performance as a travel agent. Profits and losses for the 1st 5 years of operation are:

Yr 1 - ($80,000) loss

Yr 2 ($125,000) loss

Yr 3 $500 profit

Yr 4 - $200 profit

Yr 5 - $800 profit

What is the effect of Sec 183 to Mary?

Does Mary need or have substantial authority for claiming the losses in years 1 and 2.

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