Frank Zimmerman became a partner in Monahan Associates on January 1, Year 9, with a 10% interest in Monahan's profits, losses, and capital. Monahan Associates manufactures sports equipment. Zimmerman does not materially participate in the partnership business. For the year ended December 31, Year 9, Monahan had an operating loss of $150,000. In addition, Monahan earned interest of $12,000 on a temporary investment. Monahan has kept the principal temporarily invested while awaiting delivery of equipment that is presently on order. The principal will be used to pay for this equipment. Zimmerman's passive loss for Year 9 is?

Answer rating: 100% (QA)

Passive activity rules are applicable when an individual does not materially participate in the busi... View the full answer