Jackson invested $224,000 in a passive activity five years ago. On January 1, 2017, his at-risk amount in the activity was $53,500. His share of the income and losses in the activity were $63,050 loss in 2017, $25,950 loss in 2018, and $92,750 gain in 2019. How much can Jackson deduct in 2017 and 2018? What is his taxable income from the activity in 2019? Keep in mind the at-risk rules as well as the passive loss rules.

On january 2, 2016, twilight hospital purchased a $94,800 special radiology scanner from bella inc. the scanner had a useful life of 4 years and was estimated to have no disposal value at the end of its useful life. the straight-line method of depreciation is used on this scanner. annual operating costs with this scanner are $106,000. approximately one year later, the hospital is approached by dyno technology salesperson, jacob cullen, who indicated that purchasing the scanner in 2016 from bella inc. was a mistake. he points out that dyno has a scanner that will save twilight hospital $26,000 a year in operating expenses over its 3-year useful life. jacob notes that the new scanner will cost $111,000 and has the same capabilities as the scanner purchased last year. the hospital agrees that both scanners are of equal quality. the new scanner will have no disposal value. jacob agrees to buy the old scanner from twilight hospital for $40,500. if twilight hospital sells its old scanner on january 2, 2017, compute the gain or loss on the sale. prepare an incremental analysis of twilight hospital.