Question

Rubio recently invested $21,500 (tax basis) in purchasing a limited partnership interest. His at-risk amount is $16,050. In addition, Rubio's share of the limited partnership loss for the year is $23,950, his share of income from a different limited partnership is $5, 225, and he has $41,500 in wage income and $10,750 in long-term capital gains. a. How much of Rubio's $23,950 loss is allowed considering only the tax-basis loss limitations? b. How much of the loss from part (a) is allowed under the at-risk limitations? c. How much of Rubio's $23,950 loss from the limited partnership can he deduct in the current year considering all limitations?

Answer 1

b. Rubio's Portfcel ar ofic amooot Po the limited pomeone Rublols $23,950 loss reduces has an ofsk amous to 2000 leving him with a $5,450 ab opal Coopyover ($21,520 10SS cdowed inakothe tex basis 19mptation less the $ 16,050 amant Robiro has act of sk). E ao Rubio's initial tax basis in the limited post nership is $23,950 Rubios $ 21,50 loss sedeeces hos tax basis to zedd leaving him with a $ 2,40 loss Caddyover becane of the tax basis loss limitation c. After appling the tax basis and af- of sk lemptations, Rubio cap potentfally deduct $10,825 ($16050 $5,225) of loss. Hocaevog becaease Rubio Psa limpled poomer The loss is considered a passive loss. Therefore, Rubio may dedcech Thips loss the celodeot year to the extent he has passive income. Becacceso Rubio only has only passie income of $ 16,050 Crom another impled partnership), he may oy deedet 51225 of the $ 16,050 loss levang him with a $10,825 passo actuely loss that can be cooped forward Prodermately.