displayed below.] 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 $126,000 tax basis in his LLC interest that includes his $115,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's share of Sierra Vista's general liabilities have increased to $126,000. 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 $153,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other sources of business income or loss. Note: Leave no answer blank. Enter zero if applicable. Problem 20-76 Part d (Algo) d. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $272,000 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.
displayed below.] 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 $126,000 tax basis in his LLC interest that includes his $115,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's share of Sierra Vista's general liabilities have increased to $126,000. 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 $153,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other sources of business income or loss. Note: Leave no answer blank. Enter zero if applicable. Problem 20-76 Part d (Algo) d. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $272,000 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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![Required information
Problem 20-76 (LO 20-6) (Algo)
[The following information applies to the questions displayed below.]
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 $126,000 tax
basis in his LLC interest that includes his $115,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's
share of Sierra Vista's general liabilities have increased to $126,000. 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 $153,000. As a partner
in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other
sources of business income or loss.
Note: Leave no answer blank. Enter zero if applicable.
Problem 20-76 Part d (Algo)
d. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $272,000 loss
from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.
Loss deductible](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fd7b6ce77-7d1f-42c7-90fc-6e082dc1db1b%2Fc99cf19a-5866-4363-921b-b94435fad701%2Fobbvhegh_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
Problem 20-76 (LO 20-6) (Algo)
[The following information applies to the questions displayed below.]
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 $126,000 tax
basis in his LLC interest that includes his $115,000 share of Sierra Vista's general liabilities. By the end of the year, Farell's
share of Sierra Vista's general liabilities have increased to $126,000. 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 $153,000. As a partner
in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $7,000. Farell is single and has no other
sources of business income or loss.
Note: Leave no answer blank. Enter zero if applicable.
Problem 20-76 Part d (Algo)
d. Assuming the original facts and that Farell is deemed to be an active participant in Sierra Vista, and he also has a $272,000 loss
from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.
Loss deductible
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