1In 2017, Arnold invests $80,000 for a 20% interest in a partnership in which he is...
1In 2017, Arnold invests $80,000 for a 20% interest in a partnership in which he is a material participant. The partnership incurs a loss with $100,000 being Arnold’s share. Which of the following statements is incorrect?
A All of these statements are correct.
B Arnold’s nondeductible loss of $20,000 can be carried over and used in future years (subject to the at-risk provisions).
C Since Arnold has only $80,000 of capital at risk, he cannot deduct any more than this amount against his other income.
D Arnold’s $100,000 loss is nondeductible in 2017 and 2018 under the passive activity loss provisions.
E If Arnold has taxable income of $40,000 from the partnership in 2018 and there are no other transactions that affect his at-risk amount, he can use all of the $20,000 loss carried over from 2017.
Homework Answers
The answer is following
D. Arnold’s $100,000 loss is nondeductible in 2017 and 2018 under the passive activity loss provisions.
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1In 2017, Arnold invests $80,000 for a 20% interest in a
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no need to explain, just short answers
In 2018, Arnold invests $80,000 for a 20% interest in a partnership in which he is a material participant. The partnership incurs a loss with $100,000 being Arnold's share. Is his $100,000 loss deductible? Why? I. Josh has investments in two passive activities. Activity A (acquired three years ago) produces income of $30,000 this year, while Activity B (acquired two years ago) produces a loss of $50,000. What is the amount of Josh's...
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