Martin Is a Limited Partner in a Card Shop

question 77

Multiple Choice

Martin is a limited partner in a card shop. At the end of the partnership's tax year, Martin's basis in the partnership interest is $25,000 ($5,000 cash investment plus a $20,000 share of nonqualified nonrecourse financing) . Martin's distributive share of partnership losses for the tax year is $33,000. Martin has $30,000 of passive income this year from other activities. How much of the $33,000 partnership loss can be used by Martin in the year of the loss?

• A)$5,000
• B)$25,000
• C)$30,000
• D)$33,000

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Definitions:

Wages

Payments to employees for their labor or services, typically calculated on an hourly, daily, or piecework basis and paid on a regular schedule.

Wait Staff

Employees who serve customers in establishments like restaurants, often receiving wages plus tips.

Direct Expense

Costs that can be directly attributed to the production of goods or provision of services, such as materials and labor.

Wages

Payments made to employees for their labor or services, typically on an hourly, daily, or per-task basis.