Jackie has investments in two passive activities. Activity A, which was acquired three years ago, has a beginning of the year remaining basis and at-risk balance of a positive $8,000 and no unused passive loss accumulation. Jackie’s share of the income produced by Activity A in 2020 is $60,000. Activity B, which was acquired last year, has a beginning of the year remaining basis and at-risk balance of a positive $45,000 and balance of accumulated previously unused passive losses of $40,000. Jackie’s share of the loss produced by Activity B in 2020 is $100,000. a) How much income or loss from Activity A and B reaches Jackie’s 2020 federal income tax return? b) How much, if any, accumulated unused passive loss gets trapped by each of the basis, at risk and passive activity rules, applied as of the end of 2020?
Jackie has investments in two passive activities. Activity A, which was acquired three years ago, has a beginning of the year remaining basis and at-risk balance of a positive $8,000 and no unused passive loss accumulation. Jackie’s share of the income produced by Activity A in 2020 is $60,000. Activity B, which was acquired last year, has a beginning of the year remaining basis and at-risk balance of a positive $45,000 and balance of accumulated previously unused passive losses of $40,000. Jackie’s share of the loss produced by Activity B in 2020 is $100,000.
a) How much income or loss from Activity A and B reaches Jackie’s 2020 federal income tax return?
b) How much, if any, accumulated unused passive loss gets trapped by each of the basis, at risk and passive activity rules, applied as of the end of 2020?
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