Sue invested $15,000 in the ABC Limited Partnership and received a 10 percent interest in the partnership The partnership had $40,000 of qualified nonrecourse debt and $40,000 of debt she is not responsible to repay because she is a limited partner Sue is allocated a 10 percent share of both types of debt resulting in a tax basis of $23,000 and an at risk amount of $19,000 During the year, ABC LP generated a ( $230,000) loss How much of Sue's loss is disallowed due to her tax basis orat-risk amount?

• Zero; all of her loss is allowed to be deducted.
• $3,400 disallowed because of her at-risk amount
• $4,800 disallowed because of her tax basis
• $6,800 disallowed because of her tax basis
• $6,800 disallowed because of her at-risk amount

Answer rating: 100% (QA)

correct 3400 disallowed because o... View the full answer