Final answer:
The student's question contains a mix of finance and auditing terminology, which are unrelated in the context presented. Nevertheless, the financial aspect touches on Alfonso's tax basis in his partnership and the implications of his allocated share of losses and liabilities. Limited liability protection and ease of managing a partnership are relevant topics in the scenario.
Step-by-step explanation:
The question seems to be posted in error as it mixes tax basis partnership concepts with risk assessment terminology, which are related to two different professional fields: accounting/finance and auditing. Nevertheless, we can clarify Alfonso's situation within the partnership by focusing on the purely finance-related aspects of the question.
Alfonso started the year with a tax basis in his partnership interest of $15,000. His share of the partnership liabilities includes both recourse ($7,000) and nonrecourse ($5,000) liabilities. During the year, he is allocated a $27,000 partnership ordinary business loss. However, since he doesn't materially participate in this partnership and has $4,000 of passive income from other sources, all of this information would be relevant when considering his tax situation instead of risk assessment.
A limited liability partnership protects Alfonso's personal assets from the liabilities of the business. Partnerships have several advantages; they are easy to start, manage, and attract investors. A partnership agreement would specify all the important details such as management roles and share of profits/losses, and these businesses can operate efficiently.