58. LO.7, 9 Jim Olsen owns all of the stock in Drake, a calendar year S corporation....

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58. LO.7, 9 Jim Olsen owns all of the stock in Drake, a calendar year S corporation. For calendar year 2013, Drake anticipates an operating loss of $160,000 and could, if deemed worthwhile, sell a stock investment that would generate a $10,000 long-term capital loss. Jim has an adjusted basis of $100,000 in the Drake stock. For the year, he has already realized a short-term capital gain of $7,000. He anticipates no other capital asset transactions and expects to be in the 33% tax bracket in 2013.

Write a letter to Jim (470 Bay Avenue, Bedford, MA 01730) suggesting a course of action that could save him some income taxes.

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South-Western Federal Taxation 2014 Corporations Partnerships Estates And Trusts

ISBN: 9781285424484

37th Edition

Authors: William H. Hoffman Jr., William A. Raabe, James E. Smith, David M. Maloney, James C. Young

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