Question
Scroll down to complete all parts of this task. In Year 1, Virginia Day purchased a limited partnership interest and a rental house. Virginia actively
Scroll down to complete all parts of this task.
In Year 1, Virginia Day purchased a limited partnership interest and a rental house. Virginia actively participates in the house rental. Virginia works full-time as a corporate financial analyst. In Year 4 Virginia sold the entire limited partnership interest to an unrelated party. Virginia's total income and losses from all sources for Years 1 through 4 are provided in the exhibit above. Virginia has sufficient tax basis and at-risk basis in both passive activities for all four years. Using the information provided in the exhibit, prepare a loss carryforward schedule for each of Virginia's passive activities. In the table below, enter passive activity losses (PALs) incurred as positive values and deduction of PALs as negative values to determine the amount of her cumulative suspended passive activity loss for each activity at the end of each Year 1 through 4. If the amount deducted is zero, or if the passive activity has income rather than a loss for a particular year, enter a zero (0).
Virginia Day Annual Income (Losses) Virginia Day Annual Income (Losses) \begin{tabular}{|c|c|c|c|} \hline & A & & \\ \hline 1 & Passive Activity Loss Carryforward Schedules & Rental House & \begin{tabular}{l} Limited \\ Partnership \\ Interest \end{tabular} \\ \hline 2 & Year 1 passive activity loss & 123 & 123 \\ \hline 3 & Less: passive activity loss deducted in Year 1 & 123 & 123 \\ \hline 4 & Ending Year 1 cumulative suspended passive activity losses & $0 & $0 \\ \hline 5 & Plus: Year 2 passive activity losses & 123 & 123 \\ \hline 6 & Less: passive activity loss deducted in Year 2 & 123 & 123 \\ \hline 7 & Ending Year 2 cumulative suspended passive activity losses & $0 & $0 \\ \hline 8 & Plus: Year 3 passive activity losses & 123 & 123 \\ \hline 9 & Less: passive activity loss deducted in Year 3 & 123 & 123 \\ \hline 10 & Ending Year 3 cumulative suspended passive activity losses & $0 & $0 \\ \hline 11 & Plus: Year 4 passive activity losses & 123 & 123 \\ \hline 12 & Less: passive activity loss deducted in Year 4 & 123 & 123 \\ \hline 13 & Ending Year 4 cumulative suspended passive activity losses & $0 & $0 \\ \hline \end{tabular}Step by Step Solution
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