The At-Risk Rule (LO 10.8)

Gloria is a 30% general partner in the VH Partnership. During the year, VH borrows $40,000 from a bank to fund operations and is able to pay back $10,000 before year end. VH also borrows $100,000 from Glorias wealthy retired uncle on a non-recourse basis using land held by the partnership as the collateral. How much does Glorias at-risk amount increase or decrease as a result of these transactions?

a.$12,000 increase.

b.$30,000 decrease.

c.$42,000 decrease.

d.$9,000 increase.

e.$42,000 increase.