Assume the same facts as in Problem 11-42. Assume further that Raider Corporation reports $75,000 of ordinary income, $20,000 of tax-exempt income, and a $25,000 long-term capital gain in the next year.
In problem 11-42
Monte and Allie each own 50% of Raider Corporation, an S corporation. Both individuals actively participate in Raider’s business. On January 1, Monte and Allie have adjusted bases for their Raider stock of $80,000 and $90,000, respectively. During the current year, Raider reports the following results:
Ordinary loss ……………………………………. $175,000
Tax-exempt interest income ……………………20,000
Long-term capital loss…………………………..32,000
Raider’s balance sheet at year-end shows the following liabilities: accounts payable, $90,000; mortgage payable, $30,000; and note payable to Allie, $10,000.
a. What income and deductions will Monte and Allie report from next year’s activities?
b. What is Monte’s stock basis on December 31 of next year?
c. What are Allie’s stock basis and note basis on December 31 of next year?
d. What loss carryovers (if any) are available to Monte and Allie?