What type of income are limited partners typically liable for?

Limited partners are typically liable for income generated by the partnership in which they invest. This liability is a fundamental aspect of limited partnerships, where limited partners enjoy pass-through taxation and limited liability up to the amount of their capital contributions. As such, they are not personally responsible for the partnership's debts or obligations beyond their investment.

In this context, limited partners contribute capital but do not participate in the day-to-day management of the business. Their financial exposure is limited to what they have invested in the partnership, making their liability tied directly to the income generated by the partnership operations. This means they share in the profits and losses according to their investment but have no responsibility for liabilities outside their contributions.

Other options, while they present different forms of income or liability considerations, do not accurately reflect the nature of a limited partner's responsibilities and the specific liability tied to the income generated by the partnership itself.