McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 72

{Research} Ray and Chuck own 50 percent capital and profits interests in Alpine Properties LLC.Alpine builds and manages rental real estate, and Ray and Chuck each work full time (over 1000 hours per year) managing Alpine.Alpine's debt (both at the beginning and end of the year) consists of $1,500,000 in nonrecourse mortgages obtained from an unrelated bank and secured by various rental properties.At the beginning of the current year, Ray and Chuck each had a tax basis of $250,000 in his LLC interest including his share of the nonrecourse mortgage debt.Alpine's ordinary business losses for the current year totaled $600,000 and neither member is involved in other activities that generate passive income.a.How much of each member's loss is suspended because of the tax basis limitation?
b.How much of each member's loss is suspended because of the at-risk limitation?
c.How much of each member's loss is suspended because of the passive activity loss limitation? { Hint: See §469(b)(7).