Assignment
Your client Mike Jones, a full-time computer programmer, purchased a limited partner interest for $50,000 in a computer software limited partnership run by one of his friends. Mike spent approximately 200 hours actively providing services for the partnership during the year. The limited partnership generated a $300,000 loss of which $85,000 is Mike's share. Assume Mike's only other income is W-2 wages of $150,000.
a) Wrie a memo to your partner, citing the relevant tax authority, to explain how much of the $85,000 loss Mike can deduct on his tax return.
b)Assume the same facts as above except the computer software company is a limited liability company
Write a memo to your partner, citing the relevant tax authoirty, to explain how much of the $85,000 loss Mike can deduct on his tax return.