Katrina was an S corporation shareholder. After her initial contributions, she had the following tax bases: 1) Basis in stock: $50,000 2) Basis in personal loan to S corp: $20,000 Over the first two years of the corporation's existence, the corporation experienced significant operating losses and Katrina's pass- through share of these was $60,000. Katrina materially participated in the S corporation's business. Which of the following statements regarding Katrina's tax situation is false? These were deductible losses to Katrina Katrina could deduct only $50,000 of the pass through losses. The remaining $10,000 was suspended. After these losses, Katrina had a $0 basis in stock and a $10,000 basis in loan none of the above
Katrina was an S corporation shareholder. After her initial contributions, she had the following tax bases: 1) Basis in stock: $50,000 2) Basis in personal loan to S corp: $20,000 Over the first two years of the corporation's existence, the corporation experienced significant operating losses and Katrina's pass- through share of these was $60,000. Katrina materially participated in the S corporation's business. Which of the following statements regarding Katrina's tax situation is false? These were deductible losses to Katrina Katrina could deduct only $50,000 of the pass through losses. The remaining $10,000 was suspended. After these losses, Katrina had a $0 basis in stock and a $10,000 basis in loan none of the above
Chapter14: Choice Of Business Entity—operations And Distributions
Section: Chapter Questions
Problem 43P
Related questions
Question
This answer is wrong. PLEASE GIVE ME THE RIGHT ANSWERS.
![Katrina was an S corporation shareholder. After her initial contributions, she had the following tax bases:
1) Basis in stock: $50,000
2) Basis in personal loan to S corp: $20,000
Over the first two years of the corporation's existence, the corporation experienced significant operating losses and Katrina's pass-
through share of these was $60,000. Katrina materially participated in the S corporation's business.
Which of the following statements regarding Katrina's tax situation is false?
These were deductible losses to Katrina
Katrina could deduct only $50,000 of the pass through losses. The remaining $10,000 was suspended.
After these losses, Katrina had a $0 basis in stock and a $10,000 basis in loan
none of the above](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F18e45dfa-0e00-4310-8b8b-ba277107c244%2Ffe1c9ce4-982c-4cff-837a-44cee3c21def%2Ftq14v4_processed.png&w=3840&q=75)
Transcribed Image Text:Katrina was an S corporation shareholder. After her initial contributions, she had the following tax bases:
1) Basis in stock: $50,000
2) Basis in personal loan to S corp: $20,000
Over the first two years of the corporation's existence, the corporation experienced significant operating losses and Katrina's pass-
through share of these was $60,000. Katrina materially participated in the S corporation's business.
Which of the following statements regarding Katrina's tax situation is false?
These were deductible losses to Katrina
Katrina could deduct only $50,000 of the pass through losses. The remaining $10,000 was suspended.
After these losses, Katrina had a $0 basis in stock and a $10,000 basis in loan
none of the above
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you