Mr. Jackson owns a 40 percent interest in newly formed JKL Partnership. The partners organized their business as a pass through entity so that the start-up loss would generate an immediate tax savings. Mr. Jackson, however, had a substantial loss from another business and has no taxable income against which to deduct his share of the JKL loss.
Identify the tax issue or issues suggested by the following situations, and state each issue in the form of a question.