Question
Sharon invested $8,000 in Textron Limited Partnership and received a 10 percent interest in the partnership. During the year, Textron LP generated a $120,000 loss.
Sharon invested $8,000 in Textron Limited Partnership and received a 10 percent interest in the partnership.
During the year, Textron LP generated a $120,000 loss. How much of Sharons allocated loss is disallowed due
to her at-risk amount?
A. Zero; all of her loss is allowed to be deducted
B. $2,000 disallowed
C. $5,000 disallowed
D. $4,000 disallowed
E. $7,000 disallowed
The answer is D, but could somebody please explain to me how to get the answer?
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Accounting for Governmental and Nonprofit Entities
Authors: Jacqueline Reck, Suzanne Lowensohn, Earl Wilson
17th edition
78025826, 978-1259564239, 1259564231, 978-0078025822
