Marian Owns 40% of Addison Company, a Partnership

question 32

Multiple Choice

Marian owns 40% of Addison Company, a partnership. Marian's adjusted basis in the partnership is $32,000 at the beginning of the year. During the current year, Marian receives a $10,000 cash distribution from the partnership. Addison Company reports a $100,000 operating loss for the current year. If Marian is not a material participant in Addison Company and has no other passive activities, how much of the partnership loss can she deduct on her income tax return?

• A)$-0-
• B)$10,000
• C)$22,000
• D)$40,000