Eagle Company, a partnership, had a short-term capital loss of $10,000 during the year. Aaron, who owns 25% of Eagle, will report $2,500 of Eagle's short-term capital loss on his individual tax return.

Question

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Partnerships are pass-through entities, which means that any gains or losses are passed through to the partners. Aaron's share of Eagle's short-term capital loss would be 25% of $10,000, which is $2,500. Therefore, he would report this loss on his individual tax return.

Eagle Company, a Partnership, Had a Short-Term Capital Loss of $10,000