A number of years ago, Kay acquired an interest in a partnership in which she is not

Question:

A number of years ago, Kay acquired an interest in a partnership in which she is not a material participant. Kay’s basis in her partnership interest at the beginning of 2017 is $40,000. Kay’s share of the partnership loss is $35,000 in 2017, while her share of the partnership income is $15,000 in 2018. How much may Kay deduct in 2017 and 2018, assuming that she owns no other passive activities?

Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...

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