When determining whether a limited partnership loss is deductible,a taxpayer must first:
A)Apply only the passive activity loss rules.
B)Apply only the at-risk rules.
C)Apply the passive activity loss rules and then the at-risk rules.
D)Apply the at-risk rules and then the passive activity loss rules.

Question

Quizplus · Accepted Answer

The correct order for determining the deductibility of a limited partnership loss involves first applying the at-risk rules, which limit loss deductions to the amount the taxpayer has at risk in the activity. If the loss passes the at-risk rules, the taxpayer must then apply the passive activity loss rules, which further limit the deductibility of losses from passive activities.

When Determining Whether a Limited Partnership Loss Is Deductible,a Taxpayer