Rubio recently invested $15,000 in purchasing a limited partnership interest His share of the debt in the partnership is $5,000, but he is not personally responsible for paying the debt in the event the partnership cannot pay it. In addition, Rubio’s share of the limited partnership loss for the year is $22,000, his share of income from a different limited partnership was $5,000, and he had $40,000 in wage income and $10,000 in long-term capital gains.

a. What is Rubio’s tax basis in the limited partnership after considering his $22,000 loss for the year?

b. What is Rubio’s at-risk amount in the limited partnership after considering the $22,000 loss for the year?

c. How much of Rubio’s $22,000 loss from the limited partnership can he deduct in the current year?

Answer rating: 100% (QA)

Answer 1 A limited partnership not to be confused with a limited liability partnership is a partners... View the full answer