Walter, a single taxpayer, purchased a limited partnership interest in a tax shelter in 1985. He also

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Walter, a single taxpayer, purchased a limited partnership interest in a tax shelter in 1985. He also acquired a rental house in 2012, which he actively manages. During 2012, Walter's share of the partnership's losses was $30,000, and his rental house generated $20,000 in losses. Walter's modified adjusted gross income before passive losses is $120,000. 

a. Calculate the amount of Walter's allowable deduction for rental house activities for 2012. $__________

b. Calculate the amount of Walter's allowable deduction for the partnership losses for 2012. $________

c. What may be done with the unused losses, if anything? ______________________________

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...
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Income Tax Fundamentals 2013

ISBN: 9781285586618

31st Edition

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

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