Question

Phil Boxes invested $250,000 in an LLC that produces movies. Phil is not involved in the business at all. The LLC generated a loss of $1,000,000 and issued him a Schedule K-1 loss for $300,000. Phil's 2019 AGI was $125,000. How much of the loss can Phil deduct on his 2019 tax return? Assume he has no other sources of income or loss. Would your answer be different if the LLC was a real estate investment and not a movie production one.

Answer 1

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