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  3. molly grey (single) acquired a 30 percent limited

Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several...

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Accounting

Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $55,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $23,000. In year 1, Beau Geste incurs a loss of $188,000 and does not make any distributions to the partners.

  • In year 1, Molly's AGI (excluding any income or loss from Beau Geste) is $69,000. This includes $16,500 of passive income from other passive activities.
  • In year 2, Beau Geste earns income of $36,000. In addition, Molly contributes an additional $28,350 to Beau Geste during year 2. Molly's AGI in year 2 is $74,400 (excluding any income or loss from Beau Geste). This amount includes $12,580 in income from her other passive investments.
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