The Gilpin Partnership Has an Operating Loss of $400,000 for the Current

Multiple Choice

The Gilpin Partnership has an operating loss of $400,000 for the current year. Hawkins is a general partner and owns a 40% interest in the partnership. At the beginning of the year, Hawkins' adjusted basis in the partnership interest is $30,000. During the year the partnership borrows $120,000 with a recourse note. How much of the partnership loss can Hawkins deduct on his current-year income tax return?

A) $- 0 -
B) $30,000
C) $70,000
D) $78,000
E) $200,000