A partner of a business if there is a loss can use the loss as a write off again

Question

A partner of a business if there is a loss can use the loss as a write off against income.  They do not pay taxes and carry the debt forward indefinitely. When it comes to not paying taxes if the debt is larger than the profit, is this at a Federal level only or is state included, regarding paying taxes.

For me it doesn't make sense the loss can be carried forward indefinitely and that just seems like a loop hole created for a corporation not to pay taxes.  Did I misunderstand this? Any thoughts?

Explanation / Answer

A Partner in partnership can set off losses of partnership up to the amount of investment basis (Personal investment + Loan) in the business. Partner cannot set off the losses once the investment basis is over. They need to make more investment to increase investment basis.

Hope I clarified on this. If not, please write back to me with questions you may have.

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