A Partnership Has One General Partner, Allen, Who Materially Participates

Multiple Choice

A partnership has one general partner, Allen, who materially participates in the business. Allen had a $30,000 distributive share of ordinary losses for this year and the partnership had no separately stated gains or losses. There are no changes in liabilities during this year and there are no additional contributions or distributions. At the beginning of this year, the Sec. 705 basis was $40,000 and the at-risk basis was $15,000. The basis on December 31 of this year based on the above information is

A) $10,000.
B) $15,000.
C) $25,000.
D) $40,000.