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adjusted basis

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Junior Member
What is the name of your state? Kansas

if the first year in business for a health club LLC shows
a loss of 340dollars and in the following year, the club
suffers a fire and the loss on my k-1(1065) is $3800.
(thus $340 and then $3800)
$30,000 is my initial investment for a 2percent share.
although i am a passive activity partner, i'm wondering
should there be an adjusted basis calculated?
I cannot see how 340 affects 3800 and how 3800 will affect
the third year, which should show a turn around.



Your adjusted basis in the llc is equal to your initial investment, plus any additional capital contributions you have made, plus and profit allocated to you, less and losses allocated to you, less any distributions you have had.


Junior Member

thanx...what you say makes the 'adjusted basis' sound true...!
seems the IRS could not say it as clear!


They may not have been involved with explaining tax for 40 years.

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