Question

Five years ago Gerald invested $150,000 in a passive activity, his sole investment venture. On January 1, 2018, his amount at risk in the activity was $30,000. His shares of the income and losses were as follows: Year Income (Loss) 2018 ($40,000) 2019 (30,000) 2020 50,000 Gerald holds no suspended at-risk or passive activity losses at the beginning of 2018. How much can Gerald deduct in 2018 and 2019?

Answer 1

total = $30000

Step-by-step explanation:

given data

Year Income (Loss)

2018 = 40,000

2019 = 30,000

2020 = 50,000

to find out

How much can Gerald deduct in 2018 and 2019

solution

we get here table format that is express as

year loss allowed disallowed working

2018 40000 30000 10000 40000 - 30000

2019 30000 0 30000 30000 - 0

total $40000

we can see that here amount will be more than $30000 only

so deduction or set will be available

Answer 2

The amount that will be deduct will be more than $30,000

Step-by-step explanation:

Given data:

year income

2018 $40,000

2019 $30,000

2020 $50,000

Amount of money deducted in 2018 and 2019 are calculated in below table

year loss allowed disallowed working

2018 $40,000 $30,000 $10,000 (40,000 - 30,000)

2019 $30,000 $0 $30,000 (30,000 - 0)

The amount that will be deduct will be more than $30,000