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    Income tax: Partnership losses for Rene in RST

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    9. René is a partner in the RST Partnership, which is not publicly traded. Her allocable share of RST's passive ordinary losses from a nonrealty activity for the current year is ($60,000). René has a $40,000 adjusted basis (outside basis) for her interest in RST (before deduction of any of the passive losses). Her amount "at risk" under § 465 is $30,000 (before deduction of any of the passive losses). She also has $25,000 of passive income from other sources. How much of her ($60,000) allocable loss can René deduct on her current year's tax return?

    a. $25,000.
    b. $30,000.
    c. $40,000.
    d. $60,000.
    e. None of the above.

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    Your answer is A

    $60,000 passive loss must be limited to $40,000 outside ...

    Solution Summary

    The partnership losses for Rene in RST are analyzed.