Last Year, Ted Invested $100,000 for a 50% Interest in a Partnership

question 58

Multiple Choice

Last year, Ted invested $100,000 for a 50% interest in a partnership in which he was a material participant. The partnership incurred a loss, and Ted's share was $150,000. Which of the following statements is incorrect?

• A) Ted's nondeductible loss of $50,000 can be carried over and used in the future (subject to the at-risk provisions).
• B) If Ted has taxable income of $50,000 from the partnership in the current year and no other transactions that affect his at-risk amount, he can use all of the $50,000 loss carried over.
• C) Since Ted has only $100,000 of capital at risk, he cannot deduct more than $100,000 against his other income.
• D) None of the above is incorrect.

---

Definitions:

Terminal Value

Terminal value is the estimated value of a business or investment at the end of a specific period, often used in discounted cash flow analysis.

FDA Approval

The official certification granted by the U.S. Food and Drug Administration indicating that a product, such as a drug or medical device, is safe and effective for public use.

Standard Deviation

A measure that quantifies the amount of variation or dispersion of a set of data points relative to their mean.

PHStat

An Excel-based software utility that performs statistical analysis, designed as an add-in for Microsoft Excel.