Passive Income & Losses Practice Test

Passive activity losses of an individual taxpayer can generally be used to offset

A partner in a real estate partnership had a basis of $5,000 at the beginning of the year and a basis of $10,000 at year end. The partner's at-risk amount at year end was $8,000. The partner's Form K-1 listed $12,000 as the partner's share of the partnership's ordinary loss. What amount can the partner deduct on the partner's tax return?