Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2015, the adjusted

Question:

Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2015, the adjusted basis in her YZ interest was $95,000. For 2015, 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 2015 return?
b. Compute Zelda’s adjusted basis in her YZ interest at the end of 2015.
c. Would your answers change if Zelda received a $5,000 cash distribution from YZ during 2015?

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