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Required information Assume Farell's Riverwoods K - 1 indicates passive income of $ 2 2 , 0 0 0 . Required: b - 1 .

Required information Assume Farell's Riverwoods K-1 indicates passive income of $22,000.
Required:
b-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1.
b-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. Assume Farell is deemed to be an active participant in Sierra Vista.
Required:
c-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1.
c-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. d. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $275,000 loss
from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.
Loss deductible
[The following information applies to the questions displayed below.]
Farell is a member of Sierra Vista LLC. Although Sierra Vista is involved in a number of different business ventures, it is
not currently involved in real estate either as an investor or as a developer. On January 1, year 1, Farell has a $105,000
tax basis in his LLC interest that includes his $93,000 share of Sierra Vista's general liabilities. By the end of the year,
Farell's share of Sierra Vista's general liabilities have increased to $105,000. Because of the time he spends in other
endeavors, Farell does not materially participate in Sierra Vista. His share of the Sierra Vista losses for year 1 is
$127,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $9,000. Farell
is single and has no other sources of business income or loss.
Note: Leave no answer blank. Enter zero if applicable.
Required:
a-1. Determine how much of the Sierra Vista loss Farell will currently be able to deduct on his tax return for year 1.
a-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations.
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