Dave buys an interest in a rental real estate partnership on 1/1/09. In 2013 the

Question

Dave buys an interest in a rental real estate partnership on 1/1/09. In 2013 the partnership distributes a $2,000 dollar loss to Dave. Dave is a passive investor and does not participate in the partnership in any way. Dave’s full time job is as a dentist. Dave owns 5% of the total ownership interest in the partnership. Dave’s amount at risk is $20,000. Dave’s income for 20013 is $100,000. How much of the $2,000 loss can Dave deduct in 2013? $2000 or nothing

If the partnership from last Question was a rental center that rented tools and equipment on a short term basis (less than 7 days), could Dave deduct the $2,000 loss? $2,000 or Nothing

Explanation / Answer

Case 1

Dave can deduct nothing from his income for 2013

Case 2

Dave can deduct $ 2000 from his income for 2013

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