Fundamentals of Taxation 2011 4th Edition by Ana Cruz, Debra Prendergast, Dan Schisler, Michael Deschamps

Exercise 10

Myer owns a 20% interest in a partnership (not involved in real estate) in which his at-risk amount was $50,000 at the beginning of the year. During the year, he receives a $40,000 distribution from the partnership. The partnership produces a $160,000 loss during the year. What is Myer's deductible loss for the year (ignore passive loss rules)? a. $0.
B) $10,000.
C) $32,000.
D) $50,000.