Rebecca Is a Limited Partner in the RST Partnership, Which

Rebecca is a limited partner in the RST Partnership, which is not publicly traded. Her allocable share of RST's passive ordinary losses from a nonrealty activity for the current year is ($60,000) . Rebecca has a $40,000 adjusted basis (outside basis) for her interest in RST (before deduction of any of the passive losses) . Her amount "at risk" is $30,000 (before deduction of any of the passive losses) . She also has $25,000 of passive income from other sources. She has no business losses for the year from other sources. How much of her ($60,000) allocable RST loss can Rebecca deduct on her current year's tax return?

A) $25,000
B) $30,000
C) $40,000
D) $60,000
E) None of the above

Correct Answer:

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