Nareh began the year with a tax basis of $20,000 in her partnership interest. Her share of partnership liabilities consists of $12,000 of recourse liabilities and $12,000 of nonrecourse liabilities at the beginning of the year and $12,000 of recourse liabilities and $16,000 of nonrecourse liabilities at the end of the year. During the year, she was allocated $32,000 of partnership ordinary business loss. Nareh does not materially participate in this partnership, and she has $6,000 of passive income from other sources. b. How much of Nareh's loss is limited by her at-risk amount?
Nareh began the year with a tax basis of $20,000 in her partnership interest. Her share of partnership liabilities consists of $12,000 of recourse liabilities and $12,000 of nonrecourse liabilities at the beginning of the year and $12,000 of recourse liabilities and $16,000 of nonrecourse liabilities at the end of the year. During the year, she was allocated $32,000 of partnership ordinary business loss. Nareh does not materially participate in this partnership, and she has $6,000 of passive income from other sources. b. How much of Nareh's loss is limited by her at-risk amount?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Nareh began the year with a tax basis of $20,000 in her partnership interest. Her share of partnership liabilities consists of $12,000 of recourse liabilities and $12,000 of nonrecourse liabilities at the beginning of the year and $12,000 of recourse liabilities and $16,000 of nonrecourse liabilities at the end of the year. During the year, she was allocated $32,000 of partnership ordinary business loss. Nareh does not materially participate in this partnership, and she has $6,000 of passive income from other sources. b. How much of Nareh's loss is limited by her at-risk amount?
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