Please, look at image. **Exercise 14-18 (Algorithmic) (LO. 6)**Tobias is a 50% partner in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is $170,000, and his at-risk amount is $136,000. His share of losses from Solomon for the current year is $221,000, all of which is passive. Tobias owns another investment that produced $119,000 of passive activity income during the year. (Assume that Tobias is a single taxpayer, there were no distributions or changes in liabilities during the year, and the Solomon loss is Tobias's only loss for the year from any activity.)**Problem Statement:**How much of Solomon's losses may Tobias deduct on his Form 1040? How much of the loss is suspended, and what Code provisions cause the suspensions?**Table Explanation:**| Applicable Provision | Deductible Loss | Suspended Loss ||-----------------------|-----------------|----------------|| § 704(d) Overall limitation | $215,000 | $64,500 || § 465 At-risk limitation | $172,000 | $43,000 || § 469 Passive loss limitation | $150,500 | $21,500 |The table shows that Tobias's deductible loss is limited by three different provisions, each resulting in different amounts of suspended loss.- **§ 704(d) Overall limitation**: Limits deductible loss to $215,000, suspending $64,500.- **§ 465 At-risk limitation**: Limits deductible loss to $172,000, suspending $43,000.- **§ 469 Passive loss limitation**: Limits deductible loss to $150,500, suspending $21,500.**Conclusion:**Therefore, Tobias can deduct **$537,500** on his return in the current year.**Feedback Section:**Partnership losses flow through to the partners for use on their tax returns. However, the amount and nature of the partner’s deductible losses may be limited.

Answered: Image /qna-images/answer/4c9fc41a-5a7d-4e3f-b3ae-b75eeffac395.jpg

Tobias is a 50% partner in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is $170,000, and his at-risk amount is $136,000. His share of losses from Solomon for the current year is $221,000, all of which is passive. Tobias owns another investment that produced $119,000 of passive activity income during the year. (Assume that: Tobias is a single taxpayer, there were no distributions or changes in liabilities during the year, and the Solomon loss is Tobias's only loss for the year from any activity.) How much of Solomon's losses may Tobias deduct on his Form 1040? How much of the loss is suspended and what Code provisions cause the suspensions?

Tobias is a 50% partner in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is $170,000, and his at-risk amount is $136,000. His share of losses from Solomon for the current year is $221,000, all of which is passive. Tobias owns another investment that produced $119,000 of passive activity income during the year. (Assume that: Tobias is a single taxpayer, there were no distributions or changes in liabilities during the year, and the Solomon loss is Tobias's only loss for the year from any activity.) How much of Solomon's losses may Tobias deduct on his Form 1040? How much of the loss is suspended and what Code provisions cause the suspensions?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

Kindly use PMT in your computations
Describe about the concept of COGS.
CAN I SEE THE MANUAL WORKING OF THE PROBLEM
I need this in text not images
how do you calculat mpg in excel?
Can you use excel to do the data please.
Is there an excel table showing how to use functions?
Describe internal event with example.
subject:accunting information system. Q: explainDocument flowcharts and give two examples.
Define the term lnvesting activities? Explain with an example?
What is a data dictionary?
Define Prepayments.