Irvin'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 Irvin'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

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