Manuel Purchased a 30% Interest in MAC General Partnership for $40,000

Multiple Choice

Manuel purchased a 30% interest in MAC general partnership for $40,000 cash and materially participated in the partnership for the entire year.The partnership had $50,000 in liabilities when Manuel purchased his interest and the liabilities increased $10,000 during the year.If the partnership incurred a $300,000 loss this year, how much of this loss can Manuel deduct?

A) 0
B) $40,000
C) $58,000
D) $65,000