Timo is the sole owner of Jazz Inc., an S corporation. On October 31, 2017, Timo executed

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Timo is the sole owner of Jazz Inc., an S corporation. On October 31, 2017, Timo executed an unsecured demand promissory note of $15,000, and he transferred the note to Jazz (Jazz could require Timo to pay it $15,000 on demand). When Timo transferred the note to Jazz, his tax basis in his Jazz stock was zero. On January 31, 2018, Timo paid the $15,000 to Jazz as required by the promissory note. For the taxable year ending December 31, 2017, Jazz incurred a business loss of $12,000. How much of the loss clears the stock and debt basis hurdles for deductibility?
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Essentials Of Federal Taxation 2018

ISBN: 9781260007640

9th Edition

Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

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