In 2013,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 2013 and $180,000 in 2014.Joanne's share of the LLC's losses was $68,000 in 2013 and $36,000 in 2014.How much of these losses can Joanne deduct?

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Quizplus · Accepted Answer

Joanne can deduct up to her basis in the LLC. In 2013, her basis was $90,000, and she deducted $68,000, leaving her with a basis of $22,000. In 2014, she can only deduct $22,000, as that is her remaining basis.

In 2013,Joanne Invested $90,000 for a 20% Interest in a Limited