Question
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $50,000. At the beginning of year 1,
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $50,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $22,000. In year 1, Beau Geste incurs a loss of $208,500 and does not make any distributions to the partners.
In year 1,
Molly's AGI (excluding any income or loss from Beau Geste) is $65,800. This includes $19,900 of passive income from other passive activities.
In year 2,
Beau Geste earns income of $31,500. In addition, Molly contributes an additional $37,600 to Beau Geste during year 2. Molly's AGI in year 2 is $71,500 (excluding any income or loss from Beau Geste). This amount includes $17,800 in income from her other passive investments.
a. Based on the above information, complete the following tables: (Leave no answers blank. Enter zero if applicable.)
At Risk Amount | |
Initial year 1 amount | $ |
Allowed Loss: | $ |
End of year 1 at-risk amount | $ |
Contribution for year 2 | $ |
Beau Geste Income | $ |
Allowed Loss: | $ |
End of year 2 at-risk amount | $ |
Year | Total Loss | At-Risk Amount | At-Risk Disallowed |
1 | $ | $ | $ |
2 | $ | $ | $ |
Year | Passive Activity Loss Allowed | Passive Activity Loss Disallowed |
1 | $ | $ |
2 | $ | $ |
B. What are the cumulative total passive suspended losses at the end of year 2?
C. Based on the above information, complete the following table: (Leave no answers blank. Enter zero if applicable.)
Year 2 AGI: | |
AGI Before Beau Geste | $ |
Year 2 passive income from Beau Geste | $ |
Year 2 allowed passive losses | $ |
Year 2 AGI | $ |
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