es Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $48,000 loss...

 

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es Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $48,000 loss this year (year 1). Assume her stock basis is $11,200 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,300. In year 2, Bikes-R- Us reported ordinary income of $12,600. (Leave no answer blank. Enter zero if applicable.) Required: a. What amount is Jessica allowed to deduct in year 1 and year 2? b. What are her stock and debt bases in the corporation at the end of year 1? c. What are her stock and debt bases in the corporation at the end of year 2? Deductible amount b-c Stock basis Debt basis Year 1 Year 2 es Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $48,000 loss this year (year 1). Assume her stock basis is $11,200 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,300. In year 2, Bikes-R- Us reported ordinary income of $12,600. (Leave no answer blank. Enter zero if applicable.) Required: a. What amount is Jessica allowed to deduct in year 1 and year 2? b. What are her stock and debt bases in the corporation at the end of year 1? c. What are her stock and debt bases in the corporation at the end of year 2? Deductible amount b-c Stock basis Debt basis Year 1 Year 2

Answer rating: 100% (QA)

a In year 1 Jessica is allowed to deduct a portion of the 48000 loss equal to her ownership share wh... View the full answer