Problem 09-76 (LO 09-6) (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 $140,000 tax basis in his LLC interest that includes his $129,000 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 $140,000. 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 $165,000. As a partner In the Riverwoods Partnership, he also has year 1, Schedule K-1 passive Income of $9,000. Farell is single and has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.) Problem 09-76 Part a (Algo) a-1. Determine how much of the Sierra Vista loss Farell 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. Answer is complete but not entirely correct. 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 S S S S 12 9,000 140,000 0x
Problem 09-76 (LO 09-6) (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 $140,000 tax basis in his LLC interest that includes his $129,000 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 $140,000. 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 $165,000. As a partner In the Riverwoods Partnership, he also has year 1, Schedule K-1 passive Income of $9,000. Farell is single and has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.) Problem 09-76 Part a (Algo) a-1. Determine how much of the Sierra Vista loss Farell 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. Answer is complete but not entirely correct. 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 S S S S 12 9,000 140,000 0x
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
A43.
![Problem 09-76 (LO 09-6) (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 $140,000 tax
basis in his LLC Interest that includes his $129,000 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 $140,000. 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 $165,000. As a partner
In the Riverwoods Partnership, he also has year 1, Schedule K-1 passive Income of $9,000. Farell is single and has no other
sources of business income or loss. (Leave no answer blank. Enter zero if applicable.)
Problem 09-76 Part a (Algo)
a-1. Determine how much of the Sierra Vista loss Farell 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.
Answer is complete but not entirely correct.
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
S
IS
$
S
9.000
0x
140,000✔
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8f6b9bf3-9222-4e20-9362-1764c39421ae%2F6a97f009-89a4-4485-88ff-145dc431e988%2Fuxmqb0a_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Problem 09-76 (LO 09-6) (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 $140,000 tax
basis in his LLC Interest that includes his $129,000 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 $140,000. 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 $165,000. As a partner
In the Riverwoods Partnership, he also has year 1, Schedule K-1 passive Income of $9,000. Farell is single and has no other
sources of business income or loss. (Leave no answer blank. Enter zero if applicable.)
Problem 09-76 Part a (Algo)
a-1. Determine how much of the Sierra Vista loss Farell 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.
Answer is complete but not entirely correct.
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
S
IS
$
S
9.000
0x
140,000✔
0
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