Answered step by step
Verified Expert Solution
Question
1 Approved Answer
In general, a Section 1 7 9 deduction may not exceed total taxable business income. This year, ABC Partnership claimed a Section 1 7 9
In general, a Section deduction may not exceed total taxable business income.
This year, ABC Partnership claimed a Section deduction for $ of new equipment. Total taxable business income at the partnership level was $
Gracie is a general partner in ABC Partnership. Her share of the Section deduction according to her Schedule KForm is $ However, due to losses from other businesses, total taxable business income on Gracie's individual return is zero.
How does Gracie treat her share of the Section deduction from ABC Partnership?
Gracie:
May deduct the full $ on her individual return.
May increase her outside basis by the amount of the disallowed deduction.
Must carry the $ deduction forward to the next year.
Must inform ABC Partnership of her ineligibility and request that the partnership amend its tax return.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started