Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2016, the adjusted
Question:
Zelda owns a 60 percent general interest in YZ Partnership. At the beginning of 2016, the adjusted basis in her YZ interest was $95,000. For 2017, YZ generated a $210,000 business loss, earned $14,600 dividend and interest income on its investments, and recognized a $6,200 capital gain. YZ made no distributions to its partners and had no debt.
a. How much of her share of YZ’s loss can Zelda deduct on her 2017 return? Assume the excess business loss limitation does not apply.
b. Compute Zelda’s adjusted basis in her YZ interest at the end of 2017.
c. Would your answers change if Zelda received a $5,000 cash distribution from YZ during 2017?
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Principles Of Taxation For Business And Investment Planning 2019 Edition
ISBN: 9781260161472
22nd Edition
Authors: Sally Jones, Shelley C. Rhoades Catanach, Sandra R Callaghan