Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2021, the adjusted
Question:
Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2021, the adjusted basis in her YZ interest was $95,000. For 2021, YZ generated a $210,000 business loss, earned $14,600 dividend and interest income on its investments, and recognized a $6,200 capital gain. YZ made no distributions to its partners and had no debt.
a. How much of her share of YZ’s loss can Zelda deduct on her 2021 return? Assume the excess business loss limitation does not apply.
b. Compute Zelda’s adjusted basis in her YZ interest at the end of 2021.
c. Would your answers change if Zelda received a $5,000 cash distribution from YZ during 2021?
Step by Step Answer:
c If Zelda received a 5000 cash distribution from the partnership her basis before the loss de...View the full answer
Principles Of Taxation For Business And Investment Planning 2023
ISBN: 9781264229741
26th Edition
Authors: Sally Jones, Shelley Rhoades-Catanach, Sandra Callaghan, Thomas Kubick
