Question

3. Cody owns a 10 percent interest in Creative Works, LLP. Cody originally invested $50 personally taken losses from the partnership of $200,000. The partnership took out a no loan of $800,000. What is Cody's at-risk amount? a. $300,000. b. $500,000. c. $1,100,000 d. $1,300,000 200,000. The partnership took out a nonrecourse

Answer 1

Ans: (A) $ 300,000

Explanation:

1)  Cody's at-risk amount is the:

= Amount he invested - Losses taken

= $ 500,000 - $ 200,000

= $ 300,000

2) He can not  increase his basis for the nonrecourse debt.