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The amount of partnership losses that a partner can deduct (including capital losses) is limited by Section 704(d) to the basis of the partners interest

The amount of partnership losses that a partner can deduct (including capital losses) is limited by Section 704(d) to the basis of the partners interest at the end of the partnership year. A partner's share of partnership losses in excess of basis is allowed in the current year and must not be carried forward to be deducted in future years when the partners basis increases.

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