Draft a memo to the client''s tax file describing the loss


Jasmine Gregory is a 20% member in sparrow properties, LLC, which is a less or of residential rental property. Her share of the LLC'S losses for the current year is $100000. Immediately before considering the deductibility of this loss, jasmine's capital account ( which, in this case, corresponds to her basis excluding liabilities) reflected a balance of $50000.jasmine has personally guaranteed a $10000 debt of the LLC that is allocated to her as a recourse dept. her share of the LLC'S nonrecourse debt is $30000.this debt cannot be treated as qualified nonrecourse debt. Jasmine spends several hundred hours a year working for sparrow properties.
Jasmine is also a managing member of skylark rentals, LLC, which is engaged in long-term (more than 30 days) equipment rental activities. (this is considered a passive activity. (This is considered a passive activity.) Jasmine's share of skylark's income is $36000.
Jasmine's modified adjusted gross income before considering the LLCs' activities is $300000. Determine how much of sparrow's $100000 loss jasmine can deduct on her current calendar year return. Using the format (1) facts, (2) issues, (3) conclusion, and (4) law and analysis, draft a memo to the client's tax file describing the loss limitations. Identity the code sections under which losses are suspended.

Request for Solution File

Ask an Expert for Answer!!
Accounting Basics: Draft a memo to the client''s tax file describing the loss
Reference No:- TGS057631

Expected delivery within 24 Hours