In 2014,Nigel Contributes Cash of $10,000 in Exchange for a 20

question 26

Essay

In 2014,Nigel contributes cash of $10,000 in exchange for a 20% interest in the NDP Partnership.The partnership is not a passive activity.For 2014,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 31,2014?

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Definitions:

Financing Activities

Transactions related to raising capital and repaying debt; part of the cash flows in financial statements.

Investing Activities

Transactions and events that involve the purchase or sale of long-term assets and other investments not included in cash equivalents.

Statement Of Cash Flows

A financial statement that provides aggregate data regarding all cash inflows and outflows a company receives from its ongoing operations, investment activities, and financing activities.

Financial Statements

Documents that provide an overview of the financial condition of a company, including the balance sheet, income statement, and cash flow statement.