Rubio recently invested $29,500 (tax basis) in purchasing a limited partnership

Question

Rubio recently invested $29,500 (tax basis) in purchasing a limited partnership interest. His at-risk amount is $21,650. In addition, Rubio’s share of the limited partnership loss for the year is $34,350, his share of income from a different limited partnership is $6,425, and he has $49,500 in wage income and $14,750 in long-term capital gains. (a.) How much of Rubio’s $34,350 loss is allowed considering only the tax-basis loss limitations? b. How much of the loss from part (a) is allowed under the at-risk limitations?

Explanation / Answer

Solution:-

a. How much of Rubio's $34350 loss is allowed considering only the tax basis loss limitations?

allowance loss- $29,500

b. How much of the loss from part (a) is allowed under the at-risk limitations?

allowance loss $21,650

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