Early in 2020, Bobby Joe Hyder purchased an interest in a limited partnership for $450,000. Of this amount $250,000 is paid in cash, with the remainder payable on January 1, 2023. If Bobby Joe transfers his interest to the general partner prior to January 1, 2023, the general partner will pay him $100,000 and assume full responsibility for the balance due on January 1, 2023.
For 2020, the limited partnership has allocated losses of $132,000 to Bobby Joe. How much of this loss is Bobby Joe entitled to claim as a deduction on his 2020 tax return? What is the amount of his limited partnership loss at the end of 2020?

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The Answer of Early in 2020, Bobby Joe Hyder purchased an interest in a limited partnership for $450,000. Of this amount $250,000 is paid in cash, with the remainder payable on January 1, 2023. If Bobby Joe transfers his interest to the general partner prior to January 1, 2023, the general partner will pay him $100,000 and assume full responsibility for the balance due on January 1, 2023.
For 2020, the limited partnership has allocated losses of $132,000 to Bobby Joe. How much of this loss is Bobby Joe entitled to claim as a deduction on his 2020 tax return? What is the amount of his limited partnership loss at the end of 2020?

Early in 2020, Bobby Joe Hyder Purchased an Interest in a Limited