Which of the following statements regarding partnerships losses suspended by the tax basis limitation is true?
A)Partnership losses must be used only in the year the losses are created.
B)Partnership losses may be carried back 2 years and carried forward 5 years.
C)Partnership losses may be carried forward indefinitely.
D)Partnership losses may be carried back 2 years and carried forward 20 years.

Question

Quizplus · Accepted Answer

Partnership losses that are suspended by the tax basis limitation may be carried forward indefinitely. This means that they may be used in future years when the partnership generates taxable income, subject to further limitations. The other options are incorrect: partnership losses may not be carried back, and the carryforward period is not limited to 5 or 20 years.

Which of the Following Statements Regarding Partnerships Losses Suspended by the Tax