Unrelated Individuals P, Q, R, and S Are Partners in PQRS

question 13

Multiple Choice

Unrelated individuals P, Q, R, and S are partners in PQRS Partnership.The partnership experienced an operating loss of $5,000 during the year.Based on the following information, how much loss can the partners deduct on their respective individual tax returns? $\begin{array}{lll}\text { Partner }&\text { Distributive Profit and Loss \% }&\text { Basis in Partnership}\\&&\text { Determined before Loss Distribution }\\\mathrm{P} & 40 & \$ 10,000 \\\mathrm{Q} & 25 & 8,000 \\\mathrm{R} & 25 & 1,000 \\\mathrm{~S} & 10 & 1,000\\&100 \%&\$20,000\end{array}$ The following answer choices are arranged in partner order of P, Q, R, and S.

• A)$2,000, $ 1,250, $ 1,250, $500
• B)$2,000, $ 1,250, $ 1,000, $500
• C)$2,000, $1,250, $0, $500
• D)$5,000, $3,000, $0, $0
• E)$4,000, $2,500, $2,500, $1,000

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Definitions:

Dominant Social Paradigm

The capitalist view supported by an ideology that legitimates the domination of nature for the material benefit of humans.

Capitalism

An economic system characterized by private or corporate ownership of capital goods, by investments that are determined by private decision, and by prices, production, and the distribution of goods that are determined mainly by competition in a free market.

Species Diversity

The number of species that exist in an ecosystem.

Geographic Area

A specific portion of the Earth's surface defined by natural or artificial boundaries.