On January 1, 2017, Leo paid $15,000 for 5 percent of the stock in BLS, an S

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On January 1, 2017, Leo paid $15,000 for 5 percent of the stock in BLS, an S corporation. In November, he loaned $8,000 to BLS in return for a promissory note. BLS generated a $600,000 operating loss in 2017.

a. How much of his share of the loss can Leo deduct on his 2017 return? Assume the excess business loss imitation does not apply.

b. Compute Leo’s basis in his BLS stock and his BLS note at the end of 2017.

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Principles Of Taxation For Business And Investment Planning 2019 Edition

ISBN: 9781260161472

22nd Edition

Authors: Sally Jones, Shelley C. Rhoades Catanach, Sandra R Callaghan

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Question Posted: Jan 16, 2019 09:22 AM

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On January 1, 2017, Leo paid $15,000 for 5 percent of the stock in BLS, an S

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a Leo can deduct 23000 of his 30000 allocated share of BLSs 2017 o...View the full answer

Principles Of Taxation For Business And Investment Planning 2019 Edition

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