Problem 11-52 (Algorithmic) (LO. 2, 3, 7) Five years ago Gerald invested $102,000 in a passive activity, his sole investment venture. On January 1, 2018, his amount at risk in the activity was $20,400. His shares of the income and losses were as follows: Year Income (Loss) 2018 2019 ($30,600) (20,400) 40,400 2020 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 Suspended Allowed 20,400 2018 ($30,600) $ 10,200 20,400 2019 ($20,400) 0 Total 30,600 Feedback Check My Work 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? 0 in 2018 due to the passive loss rules and of the allowable of the allowable at-risk loss for 2018, Gerald may deduct $ at-risk loss from 2019, Gerald may deduct $ 0 in 2019 due to the passive loss rules. Feedback Check My Work 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: $ 20,000 X What is his taxable income for 2020? $ At the end of 2020, what is the amount of Gerald's adjusted basis in the activity? $ 9,800 Feedback Check My Work Feedback Problem 11-52 (Algorithmic) (LO. 2, 3, 7) Five years ago Gerald invested $102,000 in a passive activity, his sole investment venture. On January 1, 2018, his amount at risk in the activity was $20,400. His shares of the income and losses were as follows: Year Income (Loss) 2018 2019 ($30,600) (20,400) 40,400 2020 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 Suspended Allowed 20,400 2018 ($30,600) $ 10,200 20,400 2019 ($20,400) 0 Total 30,600 Feedback Check My Work 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? 0 in 2018 due to the passive loss rules and of the allowable of the allowable at-risk loss for 2018, Gerald may deduct $ at-risk loss from 2019, Gerald may deduct $ 0 in 2019 due to the passive loss rules. Feedback Check My Work 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: $ 20,000 X What is his taxable income for 2020? $ At the end of 2020, what is the amount of Gerald's adjusted basis in the activity? $ 9,800 Feedback Check My Work Feedback
