Question
Thurman, a limited partner of Buffalo, LP, is allocated $29,000 of ordinary business loss from the partnership. Before the loss allocation, his tax basis in
Thurman, a limited partner of Buffalo, LP, is allocated $29,000 of ordinary business loss from the partnership. Before the loss allocation, his tax basis in Buffalo is $21,000. Included in his tax basis is his $7,000 share of recourse debt and his $5,000 share of nonrecourse debt. Thurman also has ordinary business income of $20,000 from Cowboy, LP where he materially participates as a general partner and ordinary business income of $6,000 from Bills, LP as a limited partner. (a) How much of the $29,000 loss from Buffalo can Thurman deduct currently, and how much of the loss is suspended because of (b) the tax basis, (c) the at-risk, and (d) the passive activity loss limitations?
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