[The following information applies to the questions displayed below.] Jenkins has a one-third capital and profits interest in the Maverick General Partnership. On January 1, year 1, Maverick has $120,000 of general liabilities and Jenkins has a $50,000 tax basis (including his share of Maverick's liabilities) in his partnership interest. During the year, Maverick incurred a $30,000 nonrecourse liability that is not secured by real estate. Because Maverick is a rental real estate partnership, Jenkins is deemed to be a passive participant in Maverick. His share of the Maverick losses for year 1 is $75,000. Jenkins is not involved in any other passive activities, and this is the first year he has been allocated losses from Maverick. Note: Leave no answer blank. Enter zero if applicable. Required: a-1. Determine how much of the Maverick loss Jenkins will currently be able to deduct on his tax return for year 1. a-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. a-1. Deductible loss a-2. Losses suspended by tax basis limitation a-2. Losses suspended by at-risk limitation a-2. Losses suspended by passive activity loss limitation
[The following information applies to the questions displayed below.] Jenkins has a one-third capital and profits interest in the Maverick General Partnership. On January 1, year 1, Maverick has $120,000 of general liabilities and Jenkins has a $50,000 tax basis (including his share of Maverick's liabilities) in his partnership interest. During the year, Maverick incurred a $30,000 nonrecourse liability that is not secured by real estate. Because Maverick is a rental real estate partnership, Jenkins is deemed to be a passive participant in Maverick. His share of the Maverick losses for year 1 is $75,000. Jenkins is not involved in any other passive activities, and this is the first year he has been allocated losses from Maverick. Note: Leave no answer blank. Enter zero if applicable. Required: a-1. Determine how much of the Maverick loss Jenkins will currently be able to deduct on his tax return for year 1. a-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations. a-1. Deductible loss a-2. Losses suspended by tax basis limitation a-2. Losses suspended by at-risk limitation a-2. Losses suspended by passive activity loss limitation
Chapter20: Corporations And Parterships
Section: Chapter Questions
Problem 58P
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Give me correct answer with explanation.j
![[The following information applies to the questions displayed below.]
Jenkins has a one-third capital and profits interest in the Maverick General Partnership. On January 1, year 1, Maverick has
$120,000 of general liabilities and Jenkins has a $50,000 tax basis (including his share of Maverick's liabilities) in his
partnership interest. During the year, Maverick incurred a $30,000 nonrecourse liability that is not secured by real estate.
Because Maverick is a rental real estate partnership, Jenkins is deemed to be a passive participant in Maverick. His share
of the Maverick losses for year 1 is $75,000. Jenkins is not involved in any other passive activities, and this is the first year
he has been allocated losses from Maverick.
Note: Leave no answer blank. Enter zero if applicable.
Required:
a-1. Determine how much of the Maverick loss Jenkins will currently be able to deduct on his tax return for year 1.
a-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations.
a-1. Deductible loss
a-2. Losses suspended by tax basis limitation
a-2. Losses suspended by at-risk limitation
a-2. Losses suspended by passive activity loss limitation](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Ff512d29a-89ef-4b24-a5ab-244a109a6723%2Fe42c0e71-bf6b-4b42-bace-136bc1be01d6%2Fnb7nro_processed.jpeg&w=3840&q=75)
Transcribed Image Text:[The following information applies to the questions displayed below.]
Jenkins has a one-third capital and profits interest in the Maverick General Partnership. On January 1, year 1, Maverick has
$120,000 of general liabilities and Jenkins has a $50,000 tax basis (including his share of Maverick's liabilities) in his
partnership interest. During the year, Maverick incurred a $30,000 nonrecourse liability that is not secured by real estate.
Because Maverick is a rental real estate partnership, Jenkins is deemed to be a passive participant in Maverick. His share
of the Maverick losses for year 1 is $75,000. Jenkins is not involved in any other passive activities, and this is the first year
he has been allocated losses from Maverick.
Note: Leave no answer blank. Enter zero if applicable.
Required:
a-1. Determine how much of the Maverick loss Jenkins will currently be able to deduct on his tax return for year 1.
a-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations.
a-1. Deductible loss
a-2. Losses suspended by tax basis limitation
a-2. Losses suspended by at-risk limitation
a-2. Losses suspended by passive activity loss limitation
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Step 1: Define capital loss
VIEWStep 2: a-1. Calculation of deductible loss
VIEWStep 3: a-2. Calculation of losses suspended by tax basis limitation
VIEWStep 4: a-2. Calculation of losses suspended by risk limitation
VIEWStep 5: a-2. Calculation of losses suspended by passive activity loss limitation
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT