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