A partner will NEVER recognize a LOSS on a current distribution”. So how does the partner handle such loss? The partner is supposed to keep track such loss separately (and carry forward to future years)?
you don't seem to understand what a distribution is and what the difference is between a loss from activities conducted by the partnership and a distribution. you should really consult a tax pro.
a distribution is cash or property given from the partnership to a partner. it never enters in the computation of profit or loss from the activities conducted by the partnership. that doesn't mean it has no tax effect for the partner because a distribution reduces the partner's basis and if it goes negative then the partner has income to the extent of the negativity.
profit or loss is from the activities conducted by the partnership. this can be from renting property or selling widgets. a loss is the excess of expenses over income. if you don't understand what items are income and what are expenses and what aren't see a tax pro. the partnership can also expend money for items that under the tax laws must be treated as an asset. some assets like a building or machinery must be depreciated. land can not be depreciated. Some items could be in the nature of other assets such as real estate tax escrow - money going in isn't deductible money coming out to pay real estate taxes is deductible. Some expenses paid might not even be deductible - partner life insurance, bribes, political contributions and others. then there is the payment of liabilities such as a mortgage or bank loan. they have no effect on profit or loss.
I could go on and on about various items of bookkeeping but that would require writing a book. Then I would also have to write a book about all the tax laws that affect a partnership and partner which would likely be many times the size of the book for bookkeeping.
Whether a partner can deduct a loss depends on several things.
1) is the loss from a passive activity? then the passive activity rules will come into play to determine if the partner can deduct the loss or must wait until the partnership disposes of the activity.
2) does the partner have enough basis or is at-risk for an amount to take the loss. most of the time basis and the at-risk amounts are the same but they can be different and it is the lower of the two that determines if the loss is deductible. even with enough basis see 1) above.
if you don't understand 1) or 2) see a tax pro
TT computes neither basis or at-risk amounts.
here's a link to one worksheet that is for basis computation
there are others that are available on the web.
https://tax.thomsonreuters.com/content/dam/ewp-m/documents/tax/en/pdf/other/quickfinder-updates/qpep...
