In 2019, Kipp invested $65,000 for a 30% interest in a partnership conducting a passive activity. The partnership reported losses of $200,000 in 2019 and $100,000 in 2020, Kipp's share being $60,000 in 2019 and $30,000 in 2020. How much of the losses from the partnership can Kipp deduct assuming he owns no other investments and does not participate in the partnership's operations?

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Business

Harold Zhang

Today, 16:39

In 2019, Kipp invested $65,000 for a 30% interest in a partnership conducting a passive activity. The partnership reported losses of $200,000 in 2019 and $100,000 in 2020, Kipp's share being $60,000 in 2019 and $30,000 in 2020. How much of the losses from the partnership can Kipp deduct assuming he owns no other investments and does not participate in the partnership's operations?

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Braeden Wheeler · Answer 1

Kipp would NOT deduct any losses from the the partnership assuming he owns no other investments and does not participate in the partnership's operations

Explanation:

Kipp would not deduct any losses from the the partnership assuming he owns no other investments and does not participate in the partnership's operations because NO losses are deductible in either of the year due to the fact that activity is passive and he owns no passive income - producing investments because had it been the passive loss rules not applied, the at-risk rules would have limited the deduction to $65,000 over the two-year period.