Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Please confirm answers already there and fill in the blanks. I need help with the whole question, I am not sure that what I have
Please confirm answers already there and fill in the blanks. I need help with the whole question, I am not sure that what I have is correct. Thank you!!
Problem 11-52 (Algorithmic) (LO. 2, 3, 7) Five years ago Gerald invested $142,000 in a passive activity, his sole investment venture. On January 1, 2018, his amount at risk in the activity was $28,400. His shares of the income and losses were as follows: Year Income (Loss) 2018 ($42,600) 2019 (28,400) 2020 48,400 Gerald holds no suspended at-risk or passive activity losses at the beginning of 2018. If an answer is zero, enter "O". a. If losses were limited only by the at-risk rules, how much can Gerald deduct in 2018 and 2019? Year Loss Allowed Suspended 2018 ($42,600) $ 28,400 $ 14,200 2019 ($28,400) 0 28,400 Total 42,600 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 $ 0 in 2018 due to the passive loss rules and of the allowable at- risk loss from 2019, Gerald may deduct $ 0 in 2019 due to the passive loss rules. C. Assuming Gerald has $48,400 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: 28,400 Suspended under the passive activity loss rules: $ 428 What is his taxable income for 2020? $ At the end of 2020, what is the amount of Gerald's adjusted basis in the activity? $Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started