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.

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