Mia is a 50% partner in a partnership with a beginning of the year adjusted basis in her partnership interest of $50,000.For the current year,no distributions are made to partners,and there is no change in partnership liabilities.The partnership incurred a $140,000 ordinary loss for the year.How does Mia treat her loss in excess of basis?

Question

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When a partner has a loss in excess of their basis, they are allowed to carry over that excess loss indefinitely until a subsequent year when they have a positive basis in their partnership interest. This means that Mia would not recognize any of the $90,000 excess loss in the current year, but would instead carry it forward until she has a positive basis in a future year.

Mia Is a 50% Partner in a Partnership with a Beginning