Ordinary Income and Loss

Stan had a basis in his partnership interest at the beginning of last year of $30,000. There was no change in partnership liabilities during the year. His share of the partnership’s ordinary loss last year was $40,000 and the partnership had no separately stated items. This year Stan has a distributive share of ordinary income of $30,000. The taxable income from the partnership reported on Stan’s personal income tax return this year (ignoring the at-risk and passive activity loss limitations) is
A) $10,000 ordinary loss.
B) $20,000 ordinary income.
C) $30,000 ordinary income.
D) $40,000 ordinary income.

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