Question

In the current year, Ed invests $30,000 in an oil partnership. He has taxable income for the current year of $2,000 from the oil partnership and withdraws $10,000. What is Ed’s at-risk amount at the end of the year?

Answer 1

Answer:

$22,000

Explanation:

The at-risk amount is the total amount that an investor risks losing by taking an investment.

When Ed invests $30,000 in the oil partnership, that becomes his at-risk amount.

Then Ed earns $2,000 as taxable income and withdraws $10,000 from the partnership.

Ed's at-risk amount at the end of the year would be = $30,000 + $2,000 - $10,000 = $22,000