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.

Question

Quizplus · Accepted Answer

All the statements provided are correct regarding the treatment of partnership losses and the at-risk rules.

Last Year, Ted Invested $100,000 for a 50% Interest in a Partnership