Sue invested $6,500 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $23,000 of qualified nonrecourse debt and $23,000 of debt Sue is not responsible to repay because she is a limited partner. Sue is allocated a 10 percent share of both types of debt, resulting in a tax basis of $11,100 and an at-risk amount of $8,800. During the year, ABC LP generated a ($111,000) loss. How much of Sue's loss is disallowed due to her tax basis or at-risk amount? Multiple Choice $0: all of her loss is allowed to be deducted. $2.300 disallowed because of her at-risk amount. $2,300 disallowed because of her tax basis. $4,600 disallowed because of her tax basis.
Sue invested $6,500 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $23,000 of qualified nonrecourse debt and $23,000 of debt Sue is not responsible to repay because she is a limited partner. Sue is allocated a 10 percent share of both types of debt, resulting in a tax basis of $11,100 and an at-risk amount of $8,800. During the year, ABC LP generated a ($111,000) loss. How much of Sue's loss is disallowed due to her tax basis or at-risk amount? Multiple Choice $0: all of her loss is allowed to be deducted. $2.300 disallowed because of her at-risk amount. $2,300 disallowed because of her tax basis. $4,600 disallowed because of her tax basis.
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 46P
Related questions
Question
Transcribed Image Text:Sue invested $6,500 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $23,000 of
qualified nonrecourse debt and $23,000 of debt Sue is not responsible to repay because she is a limited partner. Sue is allocated a 10
percent share of both types of debt, resulting in a tax basis of $11,100 and an at-risk amount of $8,800. During the year, ABC LP generated a
($111,000) loss. How much of Sue's loss is disallowed due to her tax basis or at-risk amount?
Multiple Choice
$0: all of her loss is allowed to be deducted.
$2.300 disallowed because of her at-risk amount.
$2,300 disallowed because of her tax basis.
$4,600 disallowed because of her tax basis.
AI-Generated Solution
AI-generated content may present inaccurate or offensive content that does not represent bartleby’s views.
Unlock instant AI solutions
Tap the button
to generate a solution
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT