In 2015,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 2015 and $180,000 in 2016.Joanne's share of the LLC's losses was $68,000 in 2015 and $36,000 in 2016.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 2015, her basis was $90,000, so she can deduct the full $68,000 loss. In 2016, her remaining basis is $22,000 ($90,000 - $68,000), so she can only deduct $22,000 of the $36,000 loss.

In 2015,Joanne Invested $90,000 for a 20% Interest in a Limited