The TimpRiders LP has operated a motorcycle dealership for a number of years. Amir is the limited partner, Francesca is
the general partner, and they share capital and profits equally. Francesca works full time managing the partnership. Both
the partnership and the partners report on a calendaryear basis. At the start of the current year, Amir and Francesca had
bases of $ and $ respectively, and the partnership did not have any liabilities. During the current year, the
partnership reported the following results from operations:
On the last day of the year, the partnership distributed $ each to Amir and Francesca.
Required:
a What outside basis do Amir and Francesca have in their partnership interests at the end of the year?
b How much of their losses are currently not deductible by Amir and Francesca because of the taxbasis limitation
c To what extent does the passive activity loss limitation apply in restricting their deductible losses for the year?
Note: For all the requirements, negative amounts should be entered with a minus sign. Leave no answers blank. Enter zero if
applicable.
