Nareh began the year with a tax basis of $32,000 in her partnership interest. Her share of partnership liabilities consists of $12,000 of recourse liabilities and $11,000 of nonrecourse liabilities at the beginning of the year and $12,000 of recourse liabilities and $15,000 of nonrecourse liabilities at the end of the year. During the year, she was allocated $43,000 of partnership ordinary business loss. Nareh does not materially participate in this partnership, and she has $7,000 of passive income from other sources. a. How much of Nareh's loss is limited by her tax basis? Answer is complete but not entirely correct. Loss limited by her tax basis $32,000 × b. How much of Nareh's loss is limited by her at-risk amount? Loss limited by her at - risk amount c. How much of Nareh's loss is limited by the passive activity loss rules? Loss limited by the passive activity loss rules
Nareh began the year with a tax basis of $32,000 in her partnership interest. Her share of partnership liabilities consists of $12,000 of recourse liabilities and $11,000 of nonrecourse liabilities at the beginning of the year and $12,000 of recourse liabilities and $15,000 of nonrecourse liabilities at the end of the year. During the year, she was allocated $43,000 of partnership ordinary business loss. Nareh does not materially participate in this partnership, and she has $7,000 of passive income from other sources. a. How much of Nareh's loss is limited by her tax basis? Answer is complete but not entirely correct. Loss limited by her tax basis $32,000 × b. How much of Nareh's loss is limited by her at-risk amount? Loss limited by her at - risk amount c. How much of Nareh's loss is limited by the passive activity loss rules? Loss limited by the passive activity loss rules
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Provide table
Transcribed Image Text:Nareh began the year with a tax basis of $32,000 in her
partnership interest. Her share of partnership liabilities
consists of $12,000 of recourse liabilities and $11,000
of nonrecourse liabilities at the beginning of the year
and $12,000 of recourse liabilities and $15,000 of
nonrecourse liabilities at the end of the year. During the
year, she was allocated $43,000 of partnership ordinary
business loss. Nareh does not materially participate in
this partnership, and she has $7,000 of passive income
from other sources.
a. How much of Nareh's loss is limited by her tax basis?
Answer is complete but not entirely correct.
Loss limited by her tax basis
$32,000 ×
b. How much of Nareh's loss is limited by her at-risk
amount?
Loss limited by her at - risk amount
c. How much of Nareh's loss is limited by the passive
activity loss rules?
Loss limited by the passive activity loss rules
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