Sandy and Larry Each Have a 50% Interest in SL

question 93

Multiple Choice

Sandy and Larry each have a 50% interest in SL Partnership. The partnership and the individuals file on a calendar year basis. In 2014, SL Partnership had a $30,000 ordinary loss. Sandy's adjusted basis in her partnership interest on January 1, 2014 was $12,000. In 2015, SL Partnership had ordinary income of $20,000. Assuming there were no other adjustments to Sandy's basis in the partnership, what amount of partnership income (loss) would Sandy show on her 2014 and 2015 individual income tax returns?

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Definitions:

Securities Markets

Securities markets are financial markets where the trading of securities like stocks and bonds takes place, facilitating equity or debt capital formation and liquidity.

Majority Shareholder

An individual or entity owning more than 50% of a company's shares, giving them significant control over the company's decisions.

Close Corporation

A type of corporation characterized by a small number of shareholders, no public market for its shares, and often operated similarly to a partnership.

Transferability

The ability of an asset to be transferred or made over from one party to another.