Question

4. Kali is a 20 percent owner in CheerSquad, LLC, a local gym for middle school and high school cheerleaders. The gym provide
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Ans: (B) $ 50,000

Explanation:

1) Kali's at-risk amount before the current year's allocation is :

=$200,000 contribution + $200,000 income - $300,000 in losses

=  $100,000 at risk.

2 ) The business allocated a $150,000 loss to Kali for the current year.

3) Therefore, she will be able to utilize $100,000 of the current year's loss against her remaining basis ($150,000) and $50,000 will be suspended due to at-risk rules.

4) Suspended loss due to at risk levels:

= $150,000 - $ 100,000

= $ 50,000

Add a comment
Know the answer?
Add Answer to:
4. Kali is a 20 percent owner in CheerSquad, LLC, a local gym for middle school...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • James and Ryann are good friends. They decide to open a sports equipment store together because...

    James and Ryann are good friends. They decide to open a sports equipment store together because of their love of the outdoors. They each own 50 percent in SportsCrazy, LLC, which is taxed as a partnership. Ryann manages the business. James has a thriving tax practice and therefore does not participate in the operation of the business. Which of the following is true? a. Only the income distributed to Ryann is considered passive income. b. Only the income distributed to...

  • Lisa is a 10 percent owner in HKAccounting, LLC, a review company for the CPA exam....

    Lisa is a 10 percent owner in HKAccounting, LLC, a review company for the CPA exam. She is also a 20 percent owner in MyPuppy, LLC a rescue organization for dogs. She does not materially participate in either company. Her at-risk and loss/income for the current year is as follows: • HKAccounting - At-risk = $800,000; Income of $150,000 • MyPuppy - At-risk = $200,000; Loss of $350,000 Lisa also has wage income of $75,000. How much of the loss...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT