Rob and Matt each own 50 percent of the Community Corporation, an S corporation with a calendar tax year. At the beginning of the tax year, Matt and Rob both have a basis in the stock of the corporation of $30,000. On July 31, 2019, Rob sells his interest in the corporation to George for $150,000, and for 2019 the Community Corporation has a loss of $100,000. a. Calculate the amount of the corporation's loss that may be deducted by Rob on his 2019 tax return. b. Calculate the amount of the corporation's loss that may be deducted by George on his 2019 tax return. c. Calculate the amount of the corporation's loss that may be deducted by Matt on his 2019 tax return.
Rob and Matt each own 50 percent of the Community Corporation, an S corporation with a calendar tax year. At the beginning of the tax year, Matt and Rob both have a basis in the stock of the corporation of $30,000. On July 31, 2019, Rob sells his interest in the corporation to George for $150,000, and for 2019 the Community Corporation has a loss of $100,000. a. Calculate the amount of the corporation's loss that may be deducted by Rob on his 2019 tax return. b. Calculate the amount of the corporation's loss that may be deducted by George on his 2019 tax return. c. Calculate the amount of the corporation's loss that may be deducted by Matt on his 2019 tax return.
Chapter22: S Corporations
Section: Chapter Questions
Problem 27P
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2. Rob and Matt each own 50 percent of the Community Corporation, an S corporation with a calendar tax year. At the
beginning of the tax year, Matt and Rob both have a basis in the stock of the corporation of $30,000. On July 31, 2019,
Rob sells his interest in the corporation to George for $150,000, and for 2019 the Community Corporation has a loss of
$100,000.
a. Calculate the amount of the corporation's loss that may be deducted by Rob on his 2019 tax
return.
b. Calculate the amount of the corporation's loss that may be deducted by George on his 2019 tax
return.
c. Calculate the amount of the corporation's loss that may be deducted by Matt on his 2019 tax
return.
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