For the tax year, LMN partnership reported $66,500 ordinary loss and $28,500 increase in recourse liabilities for which the partners are liable. Natalie, a 50% owner, had an adjusted basis of $22,500 at the beginning of the year. What is Natalies allowable loss and her adjusted basis in LMN at the end of the year?

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	Allowable loss: $19,000. Adjusted basis: $3,500.
	Allowable loss: $22,500. Adjusted basis: $0.
	Allowable loss: $33,250. Adjusted basis: $0.
	Allowable loss: $33,250. Adjusted basis: $3,500.