Jenna began the year with a tax basis of $45,000 in her partnership interest. Her share of

Question:

Jenna began the year with a tax basis of $45,000 in her interest. Her share of debt consists of $6,000 of recourse debt and $10,000 of nonrecourse debt at the beginning of the year and $6,000 of recourse debt and $13,000 of nonrecourse debt at the end of the year. During the year, she was allocated $65,000 of ordinary business loss. Jenna does not materially participate in this and she has $4,000 of passive income from other sources.
a) How much of Jenna's loss is limited by her tax basis?
b) How much of Jenna's loss is limited by her at-risk amount?
c) How much of Jenna's loss is limited by the passive activity loss rules?
Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...