Ask Question
19 September, 18:35

Sue invested $12,000 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $34,000 of qualified nonrecourse debt and $34,000 of debt she 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 $18,800 and an at risk amount of $15,400. During the year, ABC LP generated a ($97,000) loss. How much of Sue's loss is disallowed due to her tax basis or at-risk amount?

Zero; all of her loss is allowed to be deducted.

$3,400 disallowed because of her at-risk amount

$4,800 disallowed because of her tax basis

$6,800 disallowed because of her tax basis

$6,800 disallowed because of her at-risk amount

+2
Answers (1)
  1. 19 September, 21:13
    0
    Option (B) is correct.

    Explanation:

    Invested amount = $12,000

    Interest received in partnership = 10%

    qualified non-recourse debt in partnership = $34,000

    Loss allowed = $15,400 (At risk amount)

    Tax basis = $18,800

    Disallowed loss = Loss allocation - Risk amount

    = $18,800 - $15,400

    = $ 3,400
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Sue invested $12,000 in the ABC Limited Partnership and received a 10 percent interest in the partnership. The partnership had $34,000 of ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers