Bill is the sole shareholder of ABC company, an S corporation. ABC needed funds in order to provide enough working capital and took a $50,000 bank loan to purchase machinery. Bill guaranteed the loan if the corporation defaults and made a personal loan of $25,000 directly to ABC. ABC has a business loss of $10,000 in the current tax year. Bill's adjusted basis was $0 at the beginning of the tax year, and he had an $8,000 loss that exceeded his basis in the previous tax year. What is Bill's adjusted basis at the end of the current tax year?

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In this scenario Bill is the sole shareholder of ABC company an S corporation He guaranteed a ... View the full answer