035-11-4856, and ne al Beach, NC 28480. Forms and instructions can be dowm Web s
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035-11-4856, and ne al Beach, NC 28480. Forms and instructions can be dowm Web site (www.irs.gov). This is the fifth part of a six part problem that will allow tax return for Laurie and Lynn Norris. As with the previous parts, problem will ask you to prepare a portion of their tax return. You s plete the appropriate portion of each form or schedule indicated in the tions. The following basic information is provided for preparing their 2 you to prepare the 2016 this part of the hould com 92. return: Laurie inherited two limited partnerships when her grandfather passed away on October 10, 2014. The first, Towers Brothers, is a real estate venture. Ihe K-1 she received indicated that her share of the income is $3,400. Her sus pended loss in the partnership is $2,200. The second limited partnership, DrillTech, is an oil and gas business. Her loss for the year is $2,700. Laurie's . suspended loss in DrillTech is $5,600. On July 10, 2014, Lynn invested $4,000 in his brother's corporation Putter- Plus, a training device to help golfers putt better. The corporation qualified as . a small business corporation and went out of business on February 2, 2016. On April 22, 201i, the Norrises acquired 1,000 shares of NFG Inc. for $11,000. On August 10, they sell 400 shares for $2,000. On September 5, Lynn is watching Mad Money and based on Kramer's advice, he buys 300 shares of NFG for $7 a share. Required: Based on the information provided above, only fill out the appropriate portions of Form 1040, Form 8582, and finish Form 1040 Schedule DExplanation / Answer
Form 1040 Schedule K-1, Partner's Share of Income, Deductions, Credits, etc. is an informational form that is sent by the partnership to the IRS and to each partner, showing each partner's portion of the income or loss, deductions, credits, and other allocated items from the partnership.
Form 1040 schedule D : Stating Capital Loss and Gain
Form 8582 – Passive Activity Loss Limitations is used to calculate the amount of any passive activity loss that a taxpayer can take in a given year.
Generally, passive activity losses are limited for income tax purposes because passive activity losses can only be offset by passive activity income. However exceptions apply for certain rental real estate activities and additional limitations apply to publicly traded partnerships (PTP). If a taxpayer's passive losses are limited in the current year, the losses can be carried forward until the passive loss is used or until the activity that generated the passive loss is sold or otherwise disposed. TaxSlayer Pro will automatically carryover any unused passive loss until used.
There are two kinds of passive activities.
Trade or business activities in which the taxpayer did not materially participate during the year.
Rental activities, even if the taxpayer materially participate in them, unless the taxpayer is a real estate professional. If the taxpayer did materially participates in the rental activity they are permitted to use a limited amount of any passive losses based on the modified adjusted gross income of the taxpayer. No passive loss will be allowed (unless the taxpayer is a real estate professional) if the taxpayer’s modified adjusted gross income is $150,000 or more ($75,000 or more if married filing separately).
2016 Tax Reurn Oct 10,2014 Laurie inherited partnership 2 First Tower brothers Real estate ventures Drill Tech Share of the Income $3,400 ($2,400) Form1040 Schedule K-1 $1,000 Suspended loss $2,200 $5,600 Form 8582 $7,800 July 10 2014 Lynn partnership Training device Investment $4,000 Form 1040 schedule D ($3,000.00) April 22,2011 NFG corporation Per share Total Ammount Acuired 1000 $11,000 $11.00 $11,000 10-Aug sell 400 shares $2,000 $5 $2,000 Buy 300 shares at $7 2100 $7 $2,100.00 Total gain or Loss Loss ($3,000.00)Related Questions
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