Arvin's adjusted basis in the Gamma Partnership is zero at the beginning of the current year.He has a $15,000 suspended loss from the previous year.During the current year,Gamma's operating income is $30,000.Arvin is a 40% partner,and he receives a distribution of $10,000 cash this year.If Arvin materially participates in Gamma's operations,how much of the suspended loss can he deduct?
A)$ -0-
B)$ 2,000
C)$ 9,000
D)$10,000
E)$12,000

Question

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The Answer of Arvin's adjusted basis in the Gamma Partnership is zero at the beginning of the current year.He has a $15,000 suspended loss from the previous year.During the current year,Gamma's operating income is $30,000.Arvin is a 40% partner,and he receives a distribution of $10,000 cash this year.If Arvin materially participates in Gamma's operations,how much of the suspended loss can he deduct?
A)$ -0-
B)$ 2,000
C)$ 9,000
D)$10,000
E)$12,000

Arvin's Adjusted Basis in the Gamma Partnership Is Zero at the Beginning