In year 1 A and B form the AB equal partnership, with A contributing property with a FMV of $100,000 and a basis of $60,000, and B contributing $100,000 cash. In year 1 the partnership had ordinary income of $30,000, municipal bond interest of $2,000, made a $500 political contribution to a presidential campaign, and paid A s property taxes on his residence of $9,000. In addition, A was distributed some property with a FMV of $10,000 and a basis of $12,000 (assume there is no disguised sale in this problem). What is A s basis in the partnership at the end of the year? 

2. What are the three common limitations on the deductibility of a partner s share of partnership losses, in the order in which they are applied? 

3. Partner X of the XYZ equal partnership has a total basis in her partnership interest of $30,000. The partnership has $21,000 of nonqualified nonrecourse debt, and no recourse debt. XYZ has a current ordinary loss of ($120,000). X does not materially participate in XYZ, and also has another passive activity for which her share of the income for the year is $5,000. How much X s share of the XYZ loss is deductible, and how much and at what level (basis, at-risk amount, passive activity loss) are X s carryovers to the next year?

Answer rating: 100% (QA)

Answer 1 As property basis 6000000 Ordinary income 12 x 30000 1500000 Municipal bonds interest 12 x ... View the full answer