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Disney reported the following information related to his ownership in pass through entities for 2020. Pass-through...

Disney reported the following information related to his ownership in pass through entities for 2020.

Pass-through Entity

Participation

At-Risk Beginning of 2020

2020 Share of Income/(Loss)

Grumpy LP

Passive

46,000

(76,000)

Sleepy LP

Passive

21,000

6,000

Bashful LP

Active

50,000

(56,000)

Happy LP

Passive

131,000

32,000

Calculate Disney’s AGI (showing your work). What is the amount of any suspended loss and why is it suspended?

Solutions

Expert Solution

AGI(i.e., Adjusted gross income used yo calculate individuals tax liablity.

Nondeductible portion of passthrouh entity is susspended losss, which can usually be carry forward to be deducted against taxable income in future.

calculation of ACI of Disney.

Pass through entity Participation at Risk Risk Beggining of 2020 2020 sahre of Income/Loss Loss Aggregate Income
Grump LP Passive 46000 (76000)

30000

(i.e., 46000-76000)

 0
Sleepy LP Passive 21000 6000 0 27000
Bashful LP Active 50000 (56000)

6000

(i.e., 50000-56000)

 0
Happy LP Passive 131000 32000 0 163000
36000 190000

Thus, suspended Loss is 6,000(i.e., active loss) it is suspended because it is there is no active income from which it can be adjusted.It can be Carry forwad and adjusted next year fro taxable active income.

While AGI is 190000-30000=160000(as 190000 is Passive Income and loss passive Loss of 30000 is adjusted against it.

ekkarill92 answered 1 year ago
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