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Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $65,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $31,000. In year 1, Beau Geste incurs a loss of $227,100 and does not make any distributions to the partners. In year 1, Molly's AGI (excluding any income or loss from Beau Geste) is $62,000. This includes $17,300 of passive income from other passive activities. In year 2, Beau Geste earns income of $38,200. In addition, Molly contributes an additional $18,640 to Beau Geste during year 2. Molly's AGI in year 2 is $65,000 (excluding any income or loss from Beau Geste). This amount includes $14,660 in income from her other passive investments.

a. Based on the above information, determine the following amounts:

Molly Grey (single) acquired a 30 percent limited partnership interest in Beau Geste LLP several years ago for $65,000. At the beginning of year 1, Molly has tax basis and an at-risk amount of $31,000. In year 1, Beau Geste incurs a loss of $227,100 and does not make any distributions to the partners.

• In year 1, Molly's AGI (excluding any income or loss from Beau Geste) is $62,000. This includes $17,300 of passive income from other passive activities.
• In year 2, Beau Geste earns income of $38,200. In addition, Molly contributes an additional $18,640 to Beau Geste during year 2. Molly's AGI in year 2 is $65,000 (excluding any income or loss from Beau Geste). This amount includes $14,660 in income from her other passive investments.
• a1:

  Initial year 1 amount: $31,000selected answer correct Allowed loss: (31,000)selected answer correct End of year 1 at-risk amount $0selected answer correct Contribution for year 2 $18,640selected answer correct BG Income 11,460selected answer correct Allowed loss: (37,130)selected answer correct End of year 2 at-risk amount $(7,030)selected answer correct

• A2:

  Year Total Loss At-Risk Allowed At-Risk Disallowed 1 $68,130selected answer correct $31,000selected answer correct $37,130selected answer correct 2 37,130selected answer correct 37,130selected answer correct $0selected answer correct

• a3:

	Year At-Risk Allowed Passive Activity Loss Allowed Passive Activity Loss Disallowed 1 $31,000 $17,300 $13,700 2 26,120

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