11-26 Net Income/Loss and Basis. For the current year, an S corporation reported an ordinary loss...
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11-26 Net Income/Loss and Basis. For the current year, an S corporation reported an ordinary loss of $100,000, a net capital loss of $10,000, and a § 1231 gain of $20,000. M owns 10% of the stock and at the beginning of the year had a basis in her stock of $7,500. In addition, M loaned the corporation $5,000 during the year. She materially participates in the S corporation. A) Compute her deductible loss. B) The following year, the corporation reported ordinary income of $70,000 and made no distributions. How does this income affect M's basis in the stock and the debt? 11-26 Net Income/Loss and Basis. For the current year, an S corporation reported an ordinary loss of $100,000, a net capital loss of $10,000, and a § 1231 gain of $20,000. M owns 10% of the stock and at the beginning of the year had a basis in her stock of $7,500. In addition, M loaned the corporation $5,000 during the year. She materially participates in the S corporation. A) Compute her deductible loss. B) The following year, the corporation reported ordinary income of $70,000 and made no distributions. How does this income affect M's basis in the stock and the debt?
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1Basis in stock 7500 Net Ordinary loss 100000 10000 90000 Net capital loss 10000 1231 gain ... View the full answer
Related Book For
Financial Accounting an introduction to concepts, methods and uses
ISBN: 978-0324789003
13th Edition
Authors: Clyde P. Stickney, Roman L. Weil, Katherine Schipper, Jennifer Francis
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