A number of years ago, Lee acquired a 20% interest in the BlueSky Partnership for $60,000. The

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A number of years ago, Lee acquired a 20% interest in the BlueSky Partnership for $60,000. The partnership was profitable through 2015, and Lee's amount at risk in the partnership interest was $120,000 at the beginning of 2016. BlueSky incurred a loss of $400,000 in 2016 and reported income of $200,000 in 2017. Assuming that Lee is not a material participant, how much of his loss from BlueSky Partnership is deductible in 2016 and 2017? Consider the at-risk and passive activity loss rules, and assume that Lee owns no other passive investments.
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South Western Federal Taxation 2017 Comprehensive

ISBN: 9781305874169

40th Edition

Authors: William H. Hoffman, David M. Maloney, William A. Raabe, James C. Young

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