Cauliflower basis in his partnership interest

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Reference no: EM133209410

Cauliflower's basis in his partnership interest was $13,000 at the beginning of the tax year. For the year, his share of the partnership's loss was $9,000, and he also received a distribution of $6,000. Which of the following statements is correct?

1. Cauliflower's basis in his partnership interest after considering the loss and distribution is $2,000.

2. Cauliflower may deduct only $7,000 of the loss.

3. Cauliflower must recognize a $2,000 gain.

4. Cauliflower has sufficient basis to deduct the $9,000 loss in full.

Reference no: EM133209410

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