Sandy and Larry Each Have a 50% Interest in SL

question 1763

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 2017, SL Partnership had a $30,000 ordinary loss. Sandy's adjusted basis in her partnership interest on January 1, 2017, was $12,000. In 2018, 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 2017 and 2018 individual income tax returns?

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Definitions:

Sunspot Activity

Describes the phenomena of magnetic storms on the Sun's surface, manifesting as sunspots, which can affect Earth's magnetic field and thus potentially influence global climate and telecommunications.

Association

An organized group of people who share a common interest, purpose, or profession.

Causation

A relationship where one event (the cause) directly leads to the occurrence of another event (the effect).

Ceteris Paribus

A Latin term used in economics to mean "all other things being equal," isolating one economic variable to analyze its effect.