John's share of partnership loss was $60,000. He had only enough tax basis to deduct $34,000 of the loss. He may deduct the remaining loss against other income in the following year, regardless of what happens in the partnership.

Question

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The remaining loss John cannot deduct in the current year due to insufficient tax basis can only be carried forward and deducted against his share of future income or gains from the same partnership. It cannot automatically be deducted against other income in the following year without considering the partnership's performance and his tax basis in that future year.

John's Share of Partnership Loss Was $60,000