b. Kolt is organized as an LLC taxed as a partnership. Thirty percent of Kolt's loss is allocated to Danni. Danni works 20 hours a week on Kolt business activities (she is not considered to be a passive investor in Kolt). Danni has a $400,000 basis in her Kolt ownership interest, and she also has a $400,000 at-risk amount in her investment in Kolt. Danni does not report income or loss from any other business activity investments. How much of the $300,000 loss allocated to her from Kolt is Danni allowed to deduct this year?
b. Kolt is organized as an LLC taxed as a partnership. Thirty percent of Kolt's loss is allocated to Danni. Danni works 20 hours a week on Kolt business activities (she is not considered to be a passive investor in Kolt). Danni has a $400,000 basis in her Kolt ownership interest, and she also has a $400,000 at-risk amount in her investment in Kolt. Danni does not report income or loss from any other business activity investments. How much of the $300,000 loss allocated to her from Kolt is Danni allowed to deduct this year?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
[The following information applies to the questions displayed below.]
Danni is a single 30 percent owner of Kolt (a business entity). In the current year, Kolt reported a $1,000,000 business loss.
Answer the following questions associated with each of the following alternative scenarios:
Note: Leave no answer blank. Enter zero if applicable.
b. Kolt is organized as an LLC taxed as a partnership. Thirty percent of Kolt's loss is allocated to Danni. Danni works 20 hours a week
on Kolt business activities (she is not considered to be a passive investor in Kolt). Danni has a $400,000 basis in her Kolt ownership
interest, and she also has a $400,000 at-risk amount in her investment in Kolt. Danni does not report income or loss from any other
business activity investments. How much of the $300,000 loss allocated to her from Kolt is Danni allowed to deduct this year?
> Answer is complete but not entirely correct.
Allowable deduction of loss
$ 250,000 X](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8809aa0b-e1b4-4563-9951-8d9ab7423f1e%2F233be86d-dbc1-4ed2-80e5-1f6743921a27%2Ffxwzkkc_processed.png&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Danni is a single 30 percent owner of Kolt (a business entity). In the current year, Kolt reported a $1,000,000 business loss.
Answer the following questions associated with each of the following alternative scenarios:
Note: Leave no answer blank. Enter zero if applicable.
b. Kolt is organized as an LLC taxed as a partnership. Thirty percent of Kolt's loss is allocated to Danni. Danni works 20 hours a week
on Kolt business activities (she is not considered to be a passive investor in Kolt). Danni has a $400,000 basis in her Kolt ownership
interest, and she also has a $400,000 at-risk amount in her investment in Kolt. Danni does not report income or loss from any other
business activity investments. How much of the $300,000 loss allocated to her from Kolt is Danni allowed to deduct this year?
> Answer is complete but not entirely correct.
Allowable deduction of loss
$ 250,000 X
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Danni is a single 30 percent owner of Kolt (a business entity). In the current year, Kolt reported a $1,000,000 business loss. Answer the following questions associated with each of the following alternative scenarios:
Note: Leave no answer blank. Enter zero if applicable.
b. Kolt is organized as an LLC taxed as a
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