Sandy and Larry Each Have a 50% Interest in SL

question 70

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 2013,SL Partnership had a $30,000 ordinary loss.Sandy's adjusted basis in her partnership interest on January 1,2013 was $12,000.In 2014,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 2013 and 2014 individual income tax returns?

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Definitions:

Willingness To Pay

The maximum amount an individual is prepared to offer for a good or service, reflecting the value they place on it.

Supply Curve

A graphical representation that shows the relationship between the price of a good or service and the quantity of that good or service that a supplier is willing and able to supply to the market.

Consumer Surplus

The difference between what consumers are willing to pay for a good or service and what they actually pay, representing the benefit to consumers.

Allocative Efficiency

A state of the economy in which production represents consumer preferences; every good or service is distributed to meet the desires of consumers.