(a) An individual carrying on business as a partner in a partnership shall be liable for income tax only in his or her individual capacity and shall include in his or her gross income the distributive share of the net income or net loss of the partnership received by him or her or distributable to him or her during the income year.
(b) The partner shall report all deductions or credits distributable to him or her personally as a partner in the partnership.
(c) A partner's distributive share of partnership loss shall be allowed only to the extent of the adjusted basis of the partner's interest in the partnership at the end of the partnership year in which the loss occurred.
(d) Any excess of the loss over the basis shall be allowed as a deduction at the end of the partnership year in which the excess is repaid to the partnership.
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