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fomenos
3 years ago
6

Jamie purchased a 50% general partnership interest in Partnership M for $40,000 in Year 1. To finance operations, Partnership M

entered into a recourse debt agreement for $100,000 of which each partner is personally liable for half. Partnership M also entered into a nonrecourse debt agreement for $22,000, which is secured by partnership equipment. Jamie’s at-risk limitation on losses is:
Business
1 answer:
klio [65]3 years ago
4 0

Answer:

$90,000

Explanation:

Calculation to determine what Jamie’s at-risk limitation on losses is:

Using this formula

Risk limitation on losses=[Partnership M +(General partnership interest× Recourse debt agreement)]

Let plug in the formula

Risk limitation on losses= [$40,000 + (50% × $100,000)]

Risk limitation on losses=($40,000+$50,000)

Risk limitation on losses=$90,000

Therefore Jamie’s at-risk limitation on losses is:$90,000 and the reason why Jamie’s at-risk limitation on losses was the amount of $90,000 was because of his share of the recourse debt of the amount of $100,000 as well as the cash amount of $40,000 he invested.

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