In 2020, Sophia paid $100,000 for 25% interest in a partnership of which she is...
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Accounting
In 2020, Sophia paid $100,000 for 25% interest in a partnership of which she is a material participant. The partnership reported losses of $340,000 in 2020 and $580,000 in 2021 with Sophia's share being $85,000 in 2020 and $145,000 in 2021. Sophia has no other passive activity investments in 2020 or 2021.
a) how much of her 2020 loss may Sophia properly deduct on her 2020 federal income tax return?
b) how much of her 2021 loss may Sophia properly deduct on her 2021 federal income tax return?
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