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Business, 06.11.2019 19:31 aceccardi03

Farell is a member of sierra vista llc. although sierra vista is involved in a number of different business ventures, it is not currently involved in real estate either as an investor or as a developer. on january 1, year 1, farell has a $100,000 tax basis in his llc interest that includes his $90,000 share of sierra vista’s general debt obligations. by the end of the year, farell’s share of sierra vista’s general debt obligations has increased to $100,000. because of the time he spends in other endeavors, farell does not materially participate in sierra vista. his share of the sierra vista losses for year 1 is $120,000. as a partner in the riverwoods partnership, he also has year 1, schedule k-1 passive income of $5,000. a) determine how much of the sierra vista loss farell will currently be able to deduct on his tax return for year 1, and list the losses suspended due to tax basis, at-risk, and passive activity loss limitations.

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