Joey and Bob Each Have 50% Interest in a Partnership

question 30

Multiple Choice

Joey and Bob each have 50% interest in a Partnership. Both Joey and the partnership file returns on a calendar year basis. Partnership Q had a $12,000 loss in 2014. Joey's adjusted basis in his partnership interest on January 1, 2014 was $5,000. In 2015, the partnership had a profit of $10,000. Assuming there were no other adjustments to Joey's basis in the partnership, what amount of partnership income (loss) should Joey show on his 2014 and 2015 individual income tax returns?

---

Definitions:

Monitoring

The process of supervising activities or individuals to ensure compliance, performance, or progress towards objectives.

Homeowner Bailouts

Financial assistance programs designed to help homeowners facing foreclosure, often as a result of economic crises, by providing refinancing, loan modifications, or other aids to prevent loss of their homes.

Moral Hazard

A situation where one party engages in risky behavior knowing that they are protected against the consequences, often because another party bears the cost.

Irresponsible Borrowings

Financial behavior that involves taking on debt in ways that are unsustainable or without a plan to manage repayment, leading to potential financial harm.