Juan Diego began the year with a tax basis in his partnership interest of $40,000. During the year, he was allocated $26,000 of partnership ordinary business income, $100,000 of $1231 losses, and $100,000 of short-term capital losses and received a cash distribution of $40,000. (Do not round intermediate calculations.) a. What items related to these allocations does Juan Diego actually report on his tax return for the year? [Hint See Reg. $1.704-1(d)(2) and Rev. Rul. 66-94.] Answer is complete but not entirely correct. Amount Deducted Currently $ 100,000 X $ 100,000 > Section 1231 losses Short-term capital losses b. If any deductions or losses are limited, what are the carryover amounts and what is their character? [Hint See Reg. $1.704-1(d).] Answer is not complete. Short-term capital losses Section 1231 losses