Final answer:
Options A, B, and C are correctly recognized as limitations on the deduction of partnership losses, with Option D not being an inherent limitation but subject to other rules. The limitations include the basis limitation, at-risk rules, and Section 263(A) on preproductive expenses. LLPs offer greater personal asset protection compared to General Partnerships.
Step-by-step explanation:
The question pertains to the limitations on partnership losses that can be deducted on a partner's personal income tax return. Not all losses incurred by a partnership can be claimed by individual partners on their tax returns. Some key limitations include the basis limitation, at-risk limitation, and passive activity loss rules.
Options A, B, and C represent potential limitations on the deduction of partnership losses. Specifically, Option B refers to the basis limitation rule, which limits a partner's loss deductions to the extent of their adjusted basis in the partnership. Option C represents the at-risk limitation, meaning that loss deductions are limited to the amount for which the partner is financially at risk. However, Option D, related to a loss from rental activities for an individual partner, is not inherently a limitation but could be subject to passive activity loss rules depending on the partner's level of participation in the rental activity.
When contrasting with a General Partnership, all partners can potentially lose personal assets. However, in a Limited Liability Partnership (LLP), liability is limited to the partner's investment in the company, protecting personal assets from the company's debts.