Jose, Who Is Single, Is Allocated $510,000 of Income and $788,000

question 93

Multiple Choice

Jose, who is single, is allocated $510,000 of income and $788,000 of deductions from KYX General Partnership resulting in a $278,000 loss allocated to him for 2018. Jose's basis in the partnership is $300,000. How much of this loss can Jose deduct in 2018?

• A) 0
• B) $250,000
• C) $278,000
• D) $300,000

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Definitions:

Gain or Loss

The financial result that occurs when the selling price of an asset is higher or lower than its purchase price, respectively.

Cash Proceeds

The total amount of cash received from a transaction, such as the sale of an asset or a business operation.

Market Rate

The prevailing price or interest rate for goods, services, or securities in a particular market at a given time.

Interest Payments

Regular payments made to lenders as compensation for borrowing money, typically calculated as a percentage of the principal.