The Gilpin Partnership Has an Operating Loss of $400,000 for the Current

question 37

Multiple Choice

The Gilpin Partnership has an operating loss of $400,000 for the current year. Hawkins is a general partner and owns a 40% interest in the partnership. At the beginning of the year, Hawkins' adjusted basis in the partnership interest is $30,000. During the year the partnership borrows $120,000 with a recourse note. How much of the partnership loss can Hawkins deduct on his current-year income tax return?

• A)$- 0 -
• B)$30,000
• C)$70,000
• D)$78,000
• E)$200,000

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Definitions:

Accrued Fees

Charges that have been incurred but not yet recorded or paid.

Adjusted Trial Balance

A roster displaying all accounts alongside their adjusted balances, utilized in the preparation of financial statements.

Error

A mistake in the recording, classification, or processing of financial information.

Contra Revenue Account

An account used to record deductions from gross revenue, including sales returns, allowances, and discounts.