passive_loss_limits_solution - Solution: Passive activity...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
Solution : Passive activity loss limits (Sec. 469) Jane, a physician, provides the capital to purchase an interest in an orange grove. Jane hires a part-time employee who takes care of the orange grove. During 2007, the business reports a loss of $20,000 because prices are low and the relatively young trees produce only a few oranges. During 2008, the business reports another loss totaling $15,000. In 2009, the business earns $11,000. At the beginning of 2010, Jane sells the business for a gain of $13,000. Required : How much of the loss can Jane deduct in each year (2007-2010)? 2007 : Jane cannot offset the passive loss against the income from her medical practice as she does not materially participate in the business. If Jane held other passive investments that generated a profit, she could deduct the loss from the passive income they generated. In 2007, Jane has a suspended passive loss of $20,000. 2008
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 09/09/2011 for the course TAX 6845 taught by Professor Kelliher,c during the Fall '08 term at University of Central Florida.

Page1 / 2

passive_loss_limits_solution - Solution: Passive activity...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online