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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 no currently involved in real estate either as an investor or as a
developer. On January 1, year 1, Farell has a $106 , 000 tax basis in his LLC interest that
includes his $90 , 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 $106 , 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 $141 , 000 . As a partner in the Riverwoods Partnership, he also
has year 1 . Schedule K-1 passive income of $14 , 000 . Farell is single and has no other sources
of business income or loss. Note: Leave no onswer blank. Enter zero if applicable. Assume Farell
is deemed to be an active participant in Sierra Vista. Required: c-1. Determine how much of the
Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1 . c-2. List the
losses suspended due to tax-basis, at-risk, and passive activity loss limitations.

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Required information -The following information applies to the questio (55).pdf

  • 1. 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 no currently involved in real estate either as an investor or as a developer. On January 1, year 1, Farell has a $106 , 000 tax basis in his LLC interest that includes his $90 , 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 $106 , 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 $141 , 000 . As a partner in the Riverwoods Partnership, he also has year 1 . Schedule K-1 passive income of $14 , 000 . Farell is single and has no other sources of business income or loss. Note: Leave no onswer blank. Enter zero if applicable. Assume Farell is deemed to be an active participant in Sierra Vista. Required: c-1. Determine how much of the Sierra Vista loss he will ultimately be able to deduct on his tax return for year 1 . c-2. List the losses suspended due to tax-basis, at-risk, and passive activity loss limitations.