In 2014,Joanne invested $90,000 for a 20% interest in a limited liability company (LLC)in which she is a material participant.The LLC reported losses of $340,000 in 2014 and $180,000 in 2015.Joanne's share of the LLC's losses was $68,000 in 2014 and $36,000 in 2015.How much of these losses can Joanne deduct?

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Quizplus · Accepted Answer

Joanne's losses are not subject to the passive loss rules in either year because she is a material participant in the activity.However,the at-risk rules limit her total losses to $90,000 ($68,000 in 2014 and $22,000 in 2015).

In 2014,Joanne Invested $90,000 for a 20% Interest in a Limited