On January 1 2014 Leo paid 15 000 for 5 percent
On January 1, 2014, Leo paid $15,000 for 5 percent of the stock in BLS, an S corporation. In November, he loaned $8,000 to BLS in return for a promissory note. BLS generated a $600,000 operating loss in 2014.
a. How much of his share of the loss can Leo deduct on his 2014 return?
b. Compute Leo’s basis in his BLS stock and his BLS note at the end of 2014.
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