Question

10 percent partner in a partnership that incurred a $4 million business loss this year. Jahlil has no other business activities. How much of Jahlil's partnership loss can he deduct this year if he is single? What if he is married filing jointly?

Deductible partnership loss if he is single?

Deductible partnership loss if he is married fileing joinlty?

Answer 1

Any share of loss in partnership is deductible against taxable of person filing the return or against married filing jointly subject to maximum of $250,000 in a year, rest can be carried forward to be claimed against next year's income.

Here in case he is single, his share of loss 10% of 4 million i.e. 400,000. But as Jahlil does not has any other business activity, he can deduct same loss maximum of 250,000 in current year against any other income if he has. Balance 150,000 will be carried forward to be claimed deductible in future year.

In case Jahlil is filing joint return, loss can be claimed deductible up to 250,000 against other incomes in joint return. Balance 150,000 will be carried to next year.