Dmitri, a shareholder in an S corporation, has a basis of $60,000 in his S corporation stock. His share of this year's S corporation loss is $75,000. Dmitri takes out a $20,000 nonrecourse loan from a local bank and lends the proceeds to the S corporation. As a result of these transactions:

a. Dmitri's stock basis is $80,000 before deducting the loss.

b. Dmitri can deduct the loss of $75,000.

c. Dmitri has a stock basis of $60,000 and a loan basis of $20,000 before deducting any loss.

d. Dmitri's stock basis is $5,000 after deducting the loss.

e. None of these choices are correct.

Answer rating: 100% (QA)

Given Stock Basis 60000 Loan Basis 20000 3D Loss 750... View the full answer