Alfonso began the year with a tax basis in his partnership interest of $30,000. His share of partnership liabilities at the beginning and end of the y
Alfonso began the year with a tax basis in his partnership interest of $30,000. His share of partnership liabilities at the beginning and end of the year consists of $4,000 of recourse liabilities and $6,000 of nonrecourse liabilities. During the year, he was allocated $40,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership, and he has $1,000 of passive income from other sources.
\r\na. How much of Alfonso’s loss is limited by his tax basis?
\r\nb. How much of Alfonso’s loss is limited by his at-risk amount?
\r\nc. How much of Alfonso’s loss is limited by the passive activity loss rules?
\r\n