Question 22 (S corporations: use of basis in loans for entity losses) Cynthia and Doug are equal shareholders in Penguin, a calendar year S corporation. At the end of 2017, Penguin has an operating loss. Although Cynthia and Doug have the same basis in their Penguin stock, Cynthia can deduct all of her share of the corporation’s loss, while Doug cannot. How can this result take place?

Question 22 (S corporations: use of basis in loans for entity losses) Cynthia and Doug are equal shareholders in Penguin, a calendar year S corporation. At the end of 2017, Penguin has an operating loss. Although Cynthia and Doug have the same basis in their Penguin stock, Cynthia can deduct all of her share of the corporation’s loss, while Doug cannot. How can this result take place?

Individual Income Taxes

43rd Edition

ISBN:9780357109731

Author:Hoffman

Publisher:Hoffman

Chapter20: Corporations And Partnerships

Section: Chapter Questions

Problem 20DQ

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