Final answer:
Alfonso can claim a loss of $42,000, which is limited to his tax basis in the partnership. He can use $4,000 of this loss against his passive income for the year, and the remaining $38,000 is carried forward to future tax years.
Step-by-step explanation:
To determine how much of Alfonso's loss is limited by his tax basis, we start by calculating his initial basis and how it is affected by the partnership's allocated loss and his share in liabilities. Alfonso begins with a tax basis of $28,000 in his partnership interest.
This basis is increased by his share of liabilities, which includes $6,000 of recourse liabilities and $8,000 of nonrecourse liabilities, giving him an increased basis of $42,000 ($28,000 + $6,000 + $8,000). During the year, Alfonso is allocated a $45,000 partnership ordinary business loss.
Since Alfonso does not materially participate in the partnership and has $4,000 in passive income from other sources, the passive activity loss rules apply. Alfonso can only use as much loss as he has passive income to offset, which is $4,000, reducing the $45,000 loss to $41,000.
Therefore, the amount of loss Alfonso can claim is limited by his tax basis, which is $42,000. Since the disallowed loss of $41,000 does not exceed his basis of $42,000, his entire basis limits the loss.
As a result, Alfonso can claim a loss equal to his increased tax basis in the partnership of $42,000. However, he can only use $4,000 of this loss against his passive income for the year.
The remainder of the loss, $38,000 ($42,000 - $4,000), will be carried forward to future tax years and can be used when he has sufficient passive income or upon the sale of his partnership interest.