Hunter has a $38,000 loss from an investment in a partnership in which he does not participate.

Question:

Hunter has a $38,000 loss from an investment in a in which he does not participate. His basis in the interest is $35,000.
a. How much of the loss is disallowed by the at-risk rules?
b. How much of the loss is disallowed by the passive loss rules?
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...