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Juliae and Taylor do business as the Crimson Partnership, sharing profits and losses equally. Taylor is a material participant in the partnership, and the partnership

Juliae and Taylor do business as the Crimson Partnership, sharing profits and losses equally. Taylor is a material participant in the partnership, and the partnership has no outstanding debt. All parties use the calendar year for tax purposes. On January 1 of the current year, Taylor's basis in the partnership was $150,000; he made no withdrawals from the partnership during the year. The partnership sustained an operating loss of $400,000 in the current year. Taylor's personal income tax return for the current year should include:

An ordinary loss of $150,000.
An ordinary loss of $200,000.
An ordinary loss of $150,000 and a capital loss of $50,000.
An ordinary loss of $50,000 and a capital loss of $150,000.
None of the above.

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