Citrus Corporation is a calendar year S corporation with the following current year information: Operating loss $(360,000) Liabilities: Notes payable, Big Apple Bank 90,000 Notes payable, Grapefruit (individual) 60,000 On January 1 Grapefruit bought 60% of Citrus Corporation for $135,000. She then loaned Citrus Corporation $60,000 (the amount above under liabilities). How much of the operating loss may Grapefruit deduct currently? Assume the excess business loss limitation does not apply.
Citrus Corporation is a calendar year S corporation with the following current year information: Operating loss $(360,000) Liabilities: Notes payable, Big Apple Bank 90,000 Notes payable, Grapefruit (individual) 60,000 On January 1 Grapefruit bought 60% of Citrus Corporation for $135,000. She then loaned Citrus Corporation $60,000 (the amount above under liabilities). How much of the operating loss may Grapefruit deduct currently? Assume the excess business loss limitation does not apply.
Chapter17: Corporations: Introduction And Operating Rules
Section: Chapter Questions
Problem 1BCRQ
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Transcribed Image Text:Citrus Corporation is a calendar year S corporation with the following current year information:
Operating loss
$(360,000)
Liabilities:
Notes payable, Big Apple Bank
90,000
Notes payable, Grapefruit (individual) 60,000
On January 1 Grapefruit bought 60% of Citrus Corporation for $135,000. She then loaned Citrus
Corporation $60,000 (the amount above under liabilities). How much of the operating loss may
Grapefruit deduct currently? Assume the excess business loss limitation does not apply.
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