Art owns all of the stock of Santa Fe, Inc. a calendar- year S corporation. Art materially participates in Sante Fe's business. Art's stock basis at the beginning of the current year is $20,000. He also loaned $15,000 to Santa Fe. During the current year Sante Fe had an ordinary loss of $37,000. No distributions or other items of income or loss are reported. How much loss may Art deduct for the current year?
Art owns all of the stock of Santa Fe, Inc. a calendar- year S corporation. Art materially participates in Sante Fe's business. Art's stock basis at the beginning of the current year is $20,000. He also loaned $15,000 to Santa Fe. During the current year Sante Fe had an ordinary loss of $37,000. No distributions or other items of income or loss are reported. How much loss may Art deduct for the current year?
Chapter15: Taxing Business Income
Section: Chapter Questions
Problem 2DQ
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Transcribed Image Text:Art owns all of the stock of Santa Fe, Inc. a calendar-
year S corporation. Art materially participates in Sante
Fe's business. Art's stock basis at the beginning of the
current year is $20,000. He also loaned $15,000 to
Santa Fe. During the current year Sante Fe had an
ordinary loss of $37,000. No distributions or other
items of income or loss are reported. How much loss
may Art deduct for the current year?
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