Juan Diego began the year with a tax basis in his partnership interest of $50,000. During the year, he was allocated $20,000 of partnership ordinary business income, $70,000 of §1231 losses, $30,000 of short-term capital losses, and received a cash distribution of $50,000.
a. What items related to these allocations does Juan Diego actually report on his tax return for the year?
b. If any deductions or losses are limited, what are the carryover amounts and what is their character?