Wanda owns 100% of S corporation, Milk Enterprises. At the beginning of 2017, she had a zero basis and an unused ordinary loss carry over from Milk Enterprises in the amount of $5,000. During the year, Wanda secured a bank loan of $10,000 on her personal residence and made a shareholder loan of that amount to Milk Enterprises. At the end of 2017, Milk Enterprises reported on its Schedule K a $1,000 ordinary loss and a $3,000 cash distribution made to Wanda. Wanda has $10,000 in flow-through reportable income from other S corporations. How much of Milk Enterprises’ ordinary loss can Wanda deduct on her personal return?

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