How much of the loss will be suspended

Reference no: EM132765679

Question: Jay has a tax basis of 14000 in his partnership interest in JM Partnership at the beginning of the partnership tax year. The following amounts of partnership debt were allocated to Jay and are included in his beginning-of-the-year tax basis: (1) recourse debt - 4000 and (2) nonrecourse debt - 3500. There were no changes to the debt allocated to Jay during the tax year. Jay share of losses for the current year is 15000.

a) How much of the loss will be suspended at the i) tax basis level, ii) at-risk level? Assume Jay is a passive partner in JM Partnership and he is not invested in any other partnership.

b) How much of the loss will be suspended at the i) PAL level ii) Deductible on his tax return? Assume Jay is an active partner in JM Partnership and he is not invested in any other partnership.

c) How much of the loss will be suspended at the i) PAL level ii) deductible on his tax return?

Reference no: EM132765679

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