Wayne owns 30% of Label Maker Corporation. Label Maker is organized as an S corporation. During 2016,

Question:

Wayne owns 30% of Label Maker Corporation. Label Maker is organized as an S corporation. During 2016, Label Maker has a loss of $160,000. At the beginning of 2016, Wayne's at-risk amount in Label Maker is $30,000.
a. Assuming that Wayne's investment in Label Maker is not a passive activity, what is his deductible loss in 2016?
b. In 2017, Label Maker has a taxable income of $50,000. What is the effect on Wayne's 2017 income?