Required information Comprehensive Problem 09-81 (LO 09-1, LO 09-2, LO 09-3, LO 09-4, LO 09-5, LO 09-6) (Algo) Skip to question [The following information applies to the questions displayed below.] The TimpRiders LP has operated a motorcycle dealership for a number of years. Lance is the limited partner, Francesca is the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both the partnership and the partners report on a calendar-year basis. At the start of the current year, Lance and Francesca had bases of $11,400 and $4,600, respectively, and the partnership did not have any liabilities. During the current year, the partnership reported the following results from operations: Net sales $ 699,000 Cost of goods sold 520,000 Operating expenses 192,000 Short-term capital loss 1,800 Tax-exempt interest 3,600 1231 gain 7,600 On the last day of the year, the partnership distributed $4,600 each to Lance and Francesca. rev: 04_18_2022_QC_CS-302988 Comprehensive Problem 09-81 Part 1 (Algo) What outside basis do Lance and Francesca have in their partnership interests at the end of the year? How much of their losses are currently not deductible by Lance and Francesca because of the tax-basis limitation? To what extent does the passive activity loss limitation apply in restricting their deductible losses for the year? (For all the requirements, negative amounts should be entered with a minus sign. Leave no answer blank. Enter zero if applicable.)

Answer is complete but not entirely correct.

	Lance	Francesca
a. Year end basis	$5,000selected answer correct	$0selected answer correct
b. Loss limited by tax basis	$0selected answer correct	$900selected answer incorrect
c. Loss limited by passive activity	$7,500selected answer incorrect	$0selected answer correct