The MOP Partnership is involved in leasing heavy equipment under long-term leases of five years or more. Patricia has an adjusted basis for her partnership interest on January 1 of the current year of $600,000, consisting of the following:
During the year, the partnership has an operating loss of $1.2 million and distributes $60,000 of cash to Patricia. Partnership liabilities were the same at the end of the tax year, and the nonrecourse debt is not "qualified nonrecourse debt." If she owns a 60% share of partnership profits, capital, and losses, and is a material participant in the partnership, how much of her share of the operating loss can Patricia deduct? What Code provisions could cause a suspension of the loss?

Question

The MOP Partnership is involved in leasing heavy equipment under long-term leases of five years or more. Patricia has an adjusted basis for her partnership interest on January 1 of the current year of $600,000, consisting of the following:
  During the year, the partnership has an operating loss of $1.2 million and distributes $60,000 of cash to Patricia. Partnership liabilities were the same at the end of the tax year, and the nonrecourse debt is not "qualified nonrecourse debt." If she owns a 60% share of partnership profits, capital, and losses, and is a material participant in the partnership, how much of her share of the operating loss can Patricia deduct? What Code provisions could cause a suspension of the loss?

Quizplus · Accepted Answer

The Answer of The MOP Partnership is involved in leasing heavy equipment under long-term leases of five years or more. Patricia has an adjusted basis for her partnership interest on January 1 of the current year of $600,000, consisting of the following:
  During the year, the partnership has an operating loss of $1.2 million and distributes $60,000 of cash to Patricia. Partnership liabilities were the same at the end of the tax year, and the nonrecourse debt is not "qualified nonrecourse debt." If she owns a 60% share of partnership profits, capital, and losses, and is a material participant in the partnership, how much of her share of the operating loss can Patricia deduct? What Code provisions could cause a suspension of the loss?

The MOP Partnership Is Involved in Leasing Heavy Equipment Under