Molly Grey (single) acquired a 30 percent limited partnership interest in Beau G
ID: 2492536 • Letter: M
Question
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $64,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $21,000. In year 1, Beau Geste incurs a loss of $201,000 and does not make any distributions to the partners.
In year 1, Molly's AGI (excluding any income or loss from Beau Geste) is $62,500. This includes $13,500 of passive income from other passive activities.
In year 2, Beau Geste earns income of $37,400. In addition, Molly contributes an additional $34,180 to Beau Geste during year 2. Molly's AGI in year 2 is $68,200 (excluding any income or loss from Beau Geste). This amount includes $9,540 in income from her other passive investments.
Based on the above information, complete the following tables.
At risk amount
Intial year 1 amount .....?
allowed loss...........?
end of the year 1 at risk amount ....?
contriburtion for year 2 .....?
BG income .................?
Allowed loss ..............? plz explain how to calculte
end of year 2 at risk
year total loss at risk allowed At risk disallowed
1 ? ? ?
2 ? ? ?
year passive activity allowed passive activity disallowed
1 ? ?
2 ? ?
Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $64,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $21,000. In year 1, Beau Geste incurs a loss of $201,000 and does not make any distributions to the partners.
Explanation / Answer
Particulars::::::::::::::::::::::::::::::::::::Amount
Intial year 1 Amount ::::::::::::::::::$21,000
Less:
Allowed loss:::::::::::::::::::::::::::::::$21,000
__________________________________
At Risk DisAllowed:::::::::::::::::::::::$ 0
Contribution:::::::::::::::::::::::::::::::::$34,180
ADD
Income=$37,400*30/100:::::::::::::$11,220
Less
Allowed loss::::::::::::::::::::::::::::::::$39,300
___________________________________
2nd year at risk amount:::::::::::::::$6,100
______________________________________________________________________
Particulars::::::::::::::::::::::::::::::::::::Amount
Intial year 1 Amount :::::::::::::::::::$60,300( $201,000 30/100=$60,300)
Less:
Allowed loss:::::::::::::::::::::::::::::::$21,000
__________________________________
At Risk DisAllowed:::::::::::::::::::::::$39,300
2 nd year
Particulars::::::::::::::::::::::::::::::::::::Amount
Intial year 1 Amount :::::::::::::::::::$39,300
Allowed loss:::::::::::::::::::::::::::::::$39,300
__________________________________
At Risk DisAllowed:::::::::::::::::::::::0
_________________________________________________________________________
year :::::::::::::Risk Allowed::::: Passive activity allowed ::::::::::::::::::::::::::: Passive activity disallowed
1)::::::::::::::::::$21,000::::::::::::::::::$13,500 ::::::::::::::::::::::::::::::::::::::::::::::::::::$7500
2)::::::::::::::::::$39,300:::::::::::::::::::$25545:::::::::::::::::::::::::::::::::::::::::::$13755(39300*35/100=$13,755)
+ $7500
_______________________________________________________________________________________
The cumulative total passive suspended losses at the end of year 2
Particulars:::::::Amount
YEAR 2 AGI:::: $68,200
Add:
Passive income::$11,220( $37,400 * 30/100 =$11,220(2nd year from Beau Gest)
Less:
Passive Loss:$25545(39300 * 65/100=$25545)
____________________________________________________
Year 2 Agi::::$53,875
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