McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick

Exercise 20

{Research} Juan Diego began the year with a tax basis in his partnership interest of $50,000. During the year, he was allocated $20,000 of partnership ordinary business income, $70,000 of §1231 losses, $30,000 of short-term capital losses, and received a cash distribution of $50,000.
a. What items related to these allocations does Juan Diego actually report on his tax return for the year { Hint: See Reg. §1.704-1(d)(2) and Rev. Rul. 66-94.}
b. If any deductions or losses are limited, what are the carryover amounts and what is their character { Hint: See Reg. §1.704-1(d).}