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Carol has a 25% interest in the profits/losses of the CDEF partnership. For the year 2020, her share of the partnership's ordinary loss is $16,000.

Carol has a 25% interest in the profits/losses of the CDEF partnership. For the year 2020, her share of the partnership's ordinary loss is $16,000. Her share of the CDEF short-term capital loss is equal to $48,000 and her share of the CDEF long-term capital gain is equal to $11,000. At the start of the year, her outside basis was $19,000. During the year, she received a cash distribution in the amount of $6,000.

  1. What is the amount of long-term capital gain she must report on her 2020 tax return?
  2. What is the amount of ordinary loss she may deduct on her 2020 tax return?
  3. What is the amount of short-term capital loss she may deduct on her 2020 tax return?
  4. What happens to any ordinary loss or short-term capital loss she may not deduct on her 2020 tax return?

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