Question

Nona is a partner in an accounting firm. The partnership had a loss of $23,000 for 2022; Nona's share of that was $6,500. Nona's adjusted basis at the end of 2022 was $4,800. What is Nona's allowable loss for the partnership for 2022?

Answer 1

Nona's allowable loss for the partnership for 2022 is limited to her adjusted basis of $4,800, which is the maximum loss she can claim for that year.

Step-by-step explanation:

The subject of this question is Business, more specifically it concerns partnerships and tax implications in the context of accounting. When calculating an allowable loss for a partnership for tax purposes, the partner's loss is limited to the partner's adjusted basis in the partnership at the end of the year.

In Nona's case, her share of the loss is $6,500, but her adjusted basis is only $4,800, meaning that she can only claim a loss up to the amount of her adjusted basis. So, Nona's allowable loss for the partnership for 2022 is $4,800.

Any remaining loss of $1,700 ($6,500 - $4,800) would typically be suspended and carried forward to future years subject to the partnership's agreement and tax laws.

Answer 2

Nona's allowable loss for the partnership in 2022 is $4,800.

Step-by-step explanation:

To calculate Nona's allowable loss for the partnership in 2022, we need to consider her adjusted basis.

The adjusted basis is the amount that Nona has invested in the partnership.

In this case, Nona's adjusted basis at the end of 2022 was $4,800.

Since Nona's share of the partnership's loss was $6,500, but her adjusted basis is only $4,800, her allowable loss for the partnership is limited to her adjusted basis of $4,800.