Question

Jack owns a 10% interest in a partnership (not real estate) in which his at-risk amount is $42,000 at the beginning of the year. During the year, the partnership borrows $80,000 on a nonrecourse note and incurs a loss of $60,000 from operations. Jack's at-risk amount at the end of the year is $44,000. T/F

Answer 1

Answer:

After calculation risk amount is $36000

But in question it is given $44000

So it is false statement

Explanation:

The amount which is paid by a taxpayer is in risk is expanded by a lot of extra plan of action obligation and diminished by the portion of misfortunes from the action.

The at-risk amount is not affected by non recourse debt. Jack's year-end at-risk amount is

$42000-\frac{60000\times 10}{100}=42000-6000=36000$

But in question it is given that risk amount at the end will be $44000

So it is false statement