At the Beginning of the Year, Jill's Basis in Her

Multiple Choice

At the beginning of the year, Jill's basis in her 40 percent limited partnership interest was $10,000.During the year, the partnership reported a loss of $90,000 and the partnership obtained a $40,000 recourse loan on some machinery.How much loss may Jill deduct if she has $40,000 of passive income?

A) $10,000
B) $16,000
C) $26,000
D) $36,000