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Matt contributes equipment with an adjusted basis of $40,000

Customer Question
and a FMV of $36,000...
Matt contributes equipment with an adjusted basis of $40,000 and a FMV of $36,000 to CLP in return for 3% limited partnership interest. Matt's share of CLP income and losses for the year were as follows:
Interest $1,000
Dividends $600
Capital Gains $1,800
Ordinary Loss $ (8,650)
CLP had no liabilities. What are Matt's initial basis, allowed losses, and ending at risk amount?
Submitted: 1 month ago.Category: Tax
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Answered in 26 minutes by:
10/31/2017
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 month ago
PDtax
PDtax, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 4,729
Experience: 35 years tax experience, including four years at a Big 4 firm.
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Hi from Just Answer. I'm PDtax, and can assist.

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Customer reply replied 1 month ago
Where is the answer?
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 month ago

Initial basis 36000

8650 allowed loss

At risk is 30,750

Thanks for asking at just answer. Positive feedback is appreciated. I'm PDtax.

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Customer reply replied 1 month ago
That can't be right. I originally put my initial basis as 40,000 and was told that part was correct. I came up with 43,400 as my at risk prior to the loss. I was told my loss allowed was incorrect.
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 month ago

I'll look at this and get back to you shortly.

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Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 month ago

See my revised answer below:

Answer:

Initial At-Risk $40,000

Interest $ 1,000

Dividends $ 600

Capital Gain $ 1,800

At-Risk Prior to Loss $43,400

Loss Allowed under At-Risk rules ($ 9,850)

Ending At-Risk $ 33,550

Thanks for asking at Just Answer. Positive feedback, plus a bonus (this took some review) will be appreciated. I'm PDtax.

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Customer reply replied 1 month ago
I'm not trying to be difficult but those are the exact answers I put on my sheet. The loss of 9850 is not correct. That is the one I was flagged on as incorrect. That is not right.
Customer reply replied 1 month ago
Hello???
Tax Professional: PDtax, Certified Public Accountant (CPA) replied 1 month ago

I'm not sure what to do for you here. We agree on our answer, but your instructor does not. I suspect that he is missing the at risk adjustment.

I can tell you I got this answer by reviewing the rules, then I found the solution in an answer key for a tax textbook. So I am confident in it.

Thanks for using Just Answer. Kindly rate my assistance to complete your request. Five stars is the best feedback rating.

PDtax

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Customer reply replied 1 month ago
Can we put another person on this question. My instructor is saying it is not correct.
Customer reply replied 1 month ago
Your first answer wasn't even close so I'm not too confident in what I am hearing here.
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PDtax
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PDtax, Certified Public Accountant (CPA)
Category: Tax
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