Hello, Can someone help me with the following problem? Thank you in advance! In

Question

Hello, Can someone help me with the following problem? Thank you in advance!

In 2014, Matthew contributes equipment with an adjusted basis of $40,000 and a FMV of $36,000 to Construction Limited Partnership (CLP) in return for a 3% limited partnership interest. Matthew's share of CLP income and losses for the year were as follows:

Interest $1,000

Dividends $600

Capital gains $1,800

Ordinary loss ($8,650)

CLP had no liabilities. What are Matthew's initial basis, allowed losses, and ending at-risk amount?

Explanation / Answer

Answer: Intial basis of matthew is $40000 ( equipment cost at adjusted basis)

Initial basis at risk $40000

Interest $1000

Dividend $600

Capital gain $1800

At risk prior to loss $43400

Loss allowed ($8650 + 1800(Capital gain) - $600 ( dividend))

Allowed losses $9850

Ending at risk amount will be At risk prior to loss - allowed losses

Ending at risk amount $43400 - $9850

Ending at risk amount $33550

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