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

Exercise 47

Alfonso began the year with a tax basis in his partnership interest of $30,000.His share of partnership debt at the beginning and end of the year consists of $5,000 of recourse debt and $5,000 of nonrecourse debt.During the year, he was allocated $40,000 of partnership ordinary business loss.Alfonso does not materially participate in this partnership and he has $1,000 of passive income from other sources.a.How much of Alfonso's loss is limited by his tax basis?
b.How much of Alfonso's loss is limited by his at-risk amount?
c.How much of Alfonso's loss is limited by the passive activity loss rules?