In 2012, Kipp Invested $65,000 for a 30% Interest in a Partnership

question 62

Multiple Choice

In 2012, Kipp invested $65,000 for a 30% interest in a partnership conducting a passive activity. The partnership reported losses of $200,000 in 2012 and $100,000 in 2013, Kipp's share being $60,000 in 2012 and $30,000 in 2013. How much of the losses from the partnership can Kipp deduct assuming he owns no other investments and does not participate in the partnership's operations?

• A)$0 in 2012; $30,000 in 2013.
• B)$60,000 in 2012; $30,000 in 2013.
• C)$60,000 in 2012; $5,000 in 2013.
• D)$60,000 in 2012; $0 in 2013.
• E)None of the above.

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Definitions:

Investment Strategy

A set of rules, behaviors, or procedures designed to guide an investor's selection of an investment portfolio.

Market Prices

Market Prices refer to the current price at which an asset or service can be bought or sold in a particular market.

Securities

Financial instruments that represent an ownership position in a publicly-traded corporation or a creditor relationship with a government or corporation.

Perpetuity

An annuity that pays a constant stream of cash flows indefinitely.