Richard Has a 50% Interest in a Partnership,and He Materially

question 25

Multiple Choice

Richard has a 50% interest in a partnership,and he materially participates in the partnership's business.Richard's adjusted basis in the partnership was $60,000 at the beginning of the year,including his share of partnership liabilities.There were no distributions to Richard during the year.During the current year,the partnership borrowed $160,000 from a local bank to purchase equipment needed in the business.All of the partners are personally liable for all partnership debts.The partnership incurred a $320,000 loss this year.What amount can Richard claim as a loss from the partnership on his individual tax return this year?

• A)$60,000
• B)$80,000
• C)$140,000
• D)$160,000

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Definitions:

Edema

Swelling caused by excess fluid trapped in the body's tissues.

Osmotic Balance

The regulation of water and solute concentrations across membranes to stabilize internal conditions of an organism or cell.

Inflammation

The reaction of the body to harm or disease, marked by inflammation, heat, enlargement, and discomfort.

Coagulation

The process by which blood changes from a liquid to a gel, forming a clot, which is crucial for stopping bleeding.