1040-US: Partner Basis Worksheet - losses and deductions included in the basis limitation

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Question

What losses and deductions are included in the basis limitation of the partner's share of partnership losses?

Answer

IRC Reg. Section 1.704-1(d)(2) specifies the loss and deduction items of IRC Sections 702(a)(1), 702(a)(2), 702(a)(3), 702(a)(7), and 702(a)(8) are included in the losses of the partnership. The following is a list of those losses.

Not included in the losses of the partnership are 702(a)(4) charitable contributions and 702(a)(6) foreign taxes. These items are excluded in IRC section 703(a) taxable income of partnerships.

Related topic: Partner’s and Shareholder’s Basis Worksheets FAQs (1040)

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