Required information [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 sa developer. On January 1, year 1, Farell has a $100,000 tax basis in his LLC interest that includes his $90,000 share of Sierra Vista's general debt obligations. By the end of the year, Farell's share of Sierra Vista's general debt obligations has increased to $100,000. 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 $120,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $5,000. Farell is single and has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.) Assuming Farell is deemed to be an active participant in Sierra Vista and he has a $260,000 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1. note that 95000 is not the right answer
Required information [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 sa developer. On January 1, year 1, Farell has a $100,000 tax basis in his LLC interest that includes his $90,000 share of Sierra Vista's general debt obligations. By the end of the year, Farell's share of Sierra Vista's general debt obligations has increased to $100,000. 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 $120,000. As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $5,000. Farell is single and has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.) Assuming Farell is deemed to be an active participant in Sierra Vista and he has a $260,000 loss from a sole proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1. note that 95000 is not the right answer
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Gg.90.
![Required information
[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 $100,000 tax
basis in his LLC interest that includes his $90,000 share of Sierra Vista's general debt obligations. By the end of the year,
Farell's share of Sierra Vista's general debt obligations has increased to $100,000. 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 $120,000.
As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $5,000. Farell is single and
has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.)
Assuming Farell is deemed to be an active participant in Sierra Vista and he has a $260,000 loss from a sole
proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.
note that 95000 is not the right answer](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F3ac4e879-d556-4855-b014-64fe8d1fa5b0%2F0c2b390d-5281-49e3-8ed5-4a217da51f0e%2Fyr8q5zl_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[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 $100,000 tax
basis in his LLC interest that includes his $90,000 share of Sierra Vista's general debt obligations. By the end of the year,
Farell's share of Sierra Vista's general debt obligations has increased to $100,000. 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 $120,000.
As a partner in the Riverwoods Partnership, he also has year 1, Schedule K-1 passive income of $5,000. Farell is single and
has no other sources of business income or loss. (Leave no answer blank. Enter zero if applicable.)
Assuming Farell is deemed to be an active participant in Sierra Vista and he has a $260,000 loss from a sole
proprietorship, determine how much total trade or business loss Farell will deduct on his return in year 1.
note that 95000 is not the right answer
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