Question

A number of years ago, Lee acquired a 20% interest in the BlueSky Partnership for $60,000. The partnership was profitable through 2013, and Lee's amount at risk in the partnership interest was $120,000 at the beginning of 2014. BlueSky incurred a loss of $400,000 in 2014 and reported income of $200,000 in 2015. Assuming that Lee is not a material participant, how much of his loss from BlueSky Partnership is deductible in 2014 and 2015? Consider the at-risk and passive loss rules, and assume Lee owns no other investments.


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  • CreatedMay 25, 2015
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