How much of Solomon losses may Tobias deduct

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Problem - Tobias is a 50% member in Solomon LLC, which does not invest in real estate. On January 1, Tobias's adjusted basis for his LLC interest is $130,000, and his at-risk amount is $105,000. His share of losses from Solomon for the current year is $150,000, all of which is passive. Tobias owns another investment that produced $90,000 of passive activity income during the year. (Assume that Tobias is a single taxpayer, there were no distributions or changes in liabilities during the year, and that the Solomon loss is Tobias's only loss for the year from any activity.) How much of Solomon's losses may Tobias deduct on his Form 1040? How much of the loss is suspended, and what Code provisions cause the suspensions?

Reference no: EM132663180

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