In 2015, Fred invested $127,000 in a general partnership. Fred's interest is not considered to be a passive activity.

If his share of the partnership losses is $88,900 in 2015 and $62,230 in 2016, he can deduct $ in 2015, thereby reducing his at-risk amount to $. He will be limited to a $ deduction in 2016 unless he increases his amount at risk.