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Problem 6: Investor Losses Manny Kant is invested two passive activities: Categorical, LLC and Imperative, Inc. As of 1/1/2021 he had the following At-Risk Basis

Problem 6: Investor Losses

Manny Kant is invested two passive activities: Categorical, LLC and Imperative, Inc. As of 1/1/2021 he had the following At-Risk Basis and Suspended Losses in each Investment:

Categorical, LLC

Imperative, Inc.

At-Risk Basis

$300,000

$0

Suspended Losses under At-Risk Rules

0

($20,000)

Suspended Passive Activity Losses

($50,000)

$0

In addition, Manny was allocated the following passive income/(loss) from the investments in 2021 and 2022:

Categorical, LLC

Imperative, Inc.

2021 Income/(loss)

($50,000)

$50,000

2022 Income/(loss)

$200,000

($200,000)

Required: 1. What is the ended at-risk basis in Imperative, Inc as of 12/31/2022?

2. Using the information from the previous part, what amount taxable income/(loss) will Manny recognize from his investment in these activities for 2022?

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