Sandy and Larry each have a 50% interest in SL Partnership.The partnership and the individuals file on a calendar-year basis.In 2016,SL Partnership had a $30,000 ordinary loss.Sandy's adjusted basis in her partnership interest on January 1,2016,was $12,000.In 2017,SL Partnership had ordinary income of $20,000.Assuming there were no other adjustments to Sandy's basis in the partnership,what amount of partnership income (loss)would Sandy show on her 2016 and 2017 individual income tax returns?

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A)2016-Sandy's share of the loss is $15,000,but due to the basis limitations,she can only recognize $12,000; the remaining $3,000 carries forward to 2017.2017-Sandy's share of the income is $10,000 which can be netted with the $3,000 loss carryforward,resulting in $7,000 of income recognized.

Sandy and Larry Each Have a 50% Interest in SL