In 2017,Nigel Contributes Cash of $10,000 in Exchange for a 20

question 18

Essay

In 2017,Nigel contributes cash of $10,000 in exchange for a 20% interest in the NDP Partnership.The partnership is not a passive activity.For 2017,the partnership had an ordinary loss of $80,000,interest income of $2,000,dividends of $5,000,and capital gains of $4,000.How much of the current year loss is deductible by Nigel and what is Nigel's at-risk amount on December 31,2017?

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Definitions:

Obligation

A duty or commitment to fulfill a contractual, legal, or moral requirement.

Rescission

The legal action of cancelling, terminating, or annulling a contract, restoring the parties to their original positions prior to the agreement.

Surety

A person or entity that takes responsibility for another's performance of an undertaking, such as fulfilling the terms of a contract.

Fraud

A deliberate deception practiced to secure unfair or unlawful gain.