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Problem 1: John, a limited partner of Candy Apple, LP, is allocated $31,000 of ordinary business loss from the partnership. Before the loss allocation, his tax basis is $21,000 and at-risk amount is $11,000. John also has ordinary business income of $21,000 from Sweet Pea, LP as a general partner and ordinary business income of $7,000 from Red Tomato, as a limited partner. How much of the $31,000 loss from Candy Apple can John deduct currently?
Option 1: $11,000. Option 2: Incorrect Option 3: $24,000. Option 4: $31,000. Option 5: $7,000.
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