Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $45,000 loss this year (year 1). Assume her stock basis is $10,000 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,000. In year 2, Bikes-R-Us reported ordinary income of $12,000. (Leave no answer blank. Enter zero if applicable.) Required: What amount is Jessica allowed to deduct in year 1 and year 2? What are her stock and debt bases in the corporation at the end of year 1? What are her stock and debt bases in the corporation at the end of year 2? Year 1 Year 2 a. Deductible amount b-c. Stock basis Debt basis
Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $45,000 loss this year (year 1). Assume her stock basis is $10,000 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,000. In year 2, Bikes-R-Us reported ordinary income of $12,000. (Leave no answer blank. Enter zero if applicable.) Required: What amount is Jessica allowed to deduct in year 1 and year 2? What are her stock and debt bases in the corporation at the end of year 1? What are her stock and debt bases in the corporation at the end of year 2? Year 1 Year 2 a. Deductible amount b-c. Stock basis Debt basis
Chapter22: S Corporations
Section: Chapter Questions
Problem 22CE
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Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $45,000 loss this year (year 1). Assume her stock basis is $10,000 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,000. In year 2, Bikes-R-Us reported ordinary income of $12,000. (Leave no answer blank. Enter zero if applicable.)
Required:
- What amount is Jessica allowed to deduct in year 1 and year 2?
- What are her stock and debt bases in the corporation at the end of year 1?
- What are her stock and debt bases in the corporation at the end of year 2?
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT