Question

Rhonda has an adjusted basis and an at-risk amount of $23,600 in a passive activity at the beginning of the year. She also has a suspended passive activity loss of $4,720 carried over from the prior year. During the current year, she has a loss of $37,760 from the passive activity. Rhonda has no passive activity income from other sources this year. Determine the following items relating to Rhonda's passive activity as of the end of the year.At year-end, Rhonda has the following:

a. Adjusted basis in the passive activity: $0
b. Loss suspended under the at-risk rules: $4500
c. Suspended passive activity loss: $______
(I got A & B but im stuck on C...its not zero) help please..

Answer 1

Answer:

Explanation:

 At risk amount = $23,600

Suspended loss at beginning of year = $4,720

Total loss under passive activity = $37,760

a. Adjusted basis in the passive activity: $0

b. Loss suspended under the at-risk rules: $14,1600

Loss suspended under the at risk rules :Total loss under passive activity - At risk amount

=  $37,760 - 23,600  = $14,160

c. Suspended passive activity loss: $18880

Suspended loss at beginning of year +  loss suspended under the risk rules  = 4720 + 14160 = $18880