Question

Larry recently invested $25,500 (tax basis) in purchasing a limited partnership interest. His at-risk amount is also $25,500. In addition, Larry's share of the limited partnership loss for the year is $2,275, his share of income from a different limited partnership is $1,110, and he has $3,550 of dividend income from the stock he owns. How much of Larry's $2,275 loss from the limited partnership can he deduct in the current year? Deductible loss

Answer 1

Answer:

Deductive Loss: $1,165

Explanation:

The basis and at-risk hurdles do not come into effect since the basis and at-riskamounts are both $25,500. His passive income is $1,110 so the amount he candeduct for loss is only $1,165 (2,275-1,110).