Jay has a tax basis of $14,000 in his partnership interest at the beginning of thepartnership tax year. The following amounts of partnership debt were allocated to Jay and are included in his beginning of the year tax basis: (1) recourse debt - $3,000, (2) qualified nonrecourse debt - $1,000, and (3) nonrecourse debt - $500. There were nochanges to the debt allocated to Jay during the tax year. If Jay is allocated a $15,000 loss for the current year, how much of the loss will be suspended under the tax basis andat-risk limitations?
A) $0, $0.
B) $500, $1,000.
C) $1,000, $500.
D) $14,000, $1,000.

Question

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The Answer of Jay has a tax basis of $14,000 in his partnership interest at the beginning of thepartnership tax year. The following amounts of partnership debt were allocated to Jay and are included in his beginning of the year tax basis: (1) recourse debt - $3,000, (2) qualified nonrecourse debt - $1,000, and (3) nonrecourse debt - $500. There were nochanges to the debt allocated to Jay during the tax year. If Jay is allocated a $15,000 loss for the current year, how much of the loss will be suspended under the tax basis andat-risk limitations?
A) $0, $0.
B) $500, $1,000.
C) $1,000, $500.
D) $14,000, $1,000.

Jay Has a Tax Basis of $14,000 in His Partnership