Partnership loss?

[Kram BergGold]

My client has $30k of basis in a partnership. She is a limited partner. In 2012 the partnership went out of business and my client received nothing. Is the $30k a capital loss or an ordinary loss?

[appelman]

I would claim a capital loss.

I would treat it as gain or loss from the sale or exchange of the partnership interest resulting from a liquidating distribution of $0. See:

http://www.law.cornell.edu/uscode/text/26/731

[Roland Slugg]

Although a partnership interest is a capital asset, its sale can still result in several categories of gain ... ordinary, §1250, collectibles, and/or LT gain. The sale of a partnership interest at a loss, however, yields a LT or ST capital loss. (Regs §1.1(h)-1(a))