Problem 7-38 (LO. 6) Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a partnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materially participate in the business. In 2018, TGPS reports a net loss of $580,000. What are the implications of this loss for Timothy and Prada? If an amount is zero, enter "0". Timothy has an excess business loss of $ loss to offset nonbusiness income ✔ 0 ✓. He may use $ 0 X . She may use $ 290,000✔ of his share of the $580,000 LLC business Prada has an excess business loss of $ loss to offset nonbusiness income ✔ Any excess business loss is treated as part of the taxpayer's NOL carryforward ✓ 290,000 X of her share of the $580,000 LLC business

Problem 7-38 (LO. 6) Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a partnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materially participate in the business. In 2018, TGPS reports a net loss of $580,000. What are the implications of this loss for Timothy and Prada? If an amount is zero, enter "0". Timothy has an excess business loss of $ loss to offset nonbusiness income ✔ 0 ✓. He may use $ 0 X . She may use $ 290,000✔ of his share of the $580,000 LLC business Prada has an excess business loss of $ loss to offset nonbusiness income ✔ Any excess business loss is treated as part of the taxpayer's NOL carryforward ✓ 290,000 X of her share of the $580,000 LLC business

SWFT Comprehensive Volume 2019

42nd Edition

ISBN:9780357233306

Author:Maloney

Publisher:Maloney

Chapter7: Deductions And Losses: Certain Business Expenses And Losses

Section: Chapter Questions

Problem 38P

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Question

Problem 7-38 (LO. 6)
Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a
partnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materially
participate in the business. In 2018, TGPS reports a net loss of $580,000. What are the implications of this loss for Timothy and Prada?
If an amount is zero, enter "0".
Timothy has an excess business loss of
loss to offset nonbusiness income ✓
0. He may use
290,000✔ of his share of the $580,000 LLC business
0 X. She may use $ 290,000 X of her share of the $580,000 LLC business
Prada has an excess business loss of $
loss to offset nonbusiness income ✔
Any excess business loss is treated as part of the taxpayer's NOL carryforward ✓

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