Bond Corporation is an electing S corporation with two equal shareholders (A and B). In 2022 Bond had separately computed income of 100,000 and a non-separately computed loss of $500,000. Before considering the 2022 income and losses, the shareholders' stock bases were as follows:

A $200,000

B $400,000

At the end of 2022, a bank loaned Bond Corporation $200,000. Shareholder A co-signed the loan. Bond made all loan payments in 2022.

Bond made cash distributions in 2022 of 100,000 to A and 100,000 to B 

FOR EACH OF A AND B:

1. HOW MUCH OF THE LOSS IS DEDUCTIBLE IN 2022?

2. WHAT IS THE BASIS OF THE STOCK AT THE END OF 2022?

 

Answer rating: 100% (QA)

For each shareholder A and B lets calculate the deductible loss for 2022 and the basis of their stock at the end of 2022 1 Deductible Loss for 2022 a ... View the full answer