63. LO.8, 9 As of January 1, 2012, Norman has a basis of $90,000 in his 30% capital interest in the Plata Partnership. He and the partnership use the calendar year for tax purposes.

The partnership incurs an operating loss of $450,000 for 2012 and a profit of

$270,000 for 2013.

a. How much, if any, loss may Norman recognize for 2012?

b. How much income must Norman recognize for 2013?

c. What basis will Norman have in his partnership interest as of January 1, 2013?

d. What basis will Norman have in his partnership interest as of January 1, 2014?

e. What year-end tax planning would you suggest to ensure that a partner could deduct all of his or her share of any partnership losses?