A calendar year S corporation reports an ordinary loss of $80,000 and a capital loss of $20,000. Mei Freiberg owns 30% of the corporate stock and has a $24,000 basis in her stock. She has asked that you determine the amounts of the ordinary loss and capital loss, if any, that flow through to Freiberg.

Complete the tax memo below for the files, outlining your computations.

TAX FILE MEMORANDUM

Date: December 3, 2015

RE: Flow-Through of Losses

Freiberg's share of the operating loss is $24,000 , and her share of the capital loss is $6,000 .

Since her basis in the stock is $24,000, only $24,000 is deductible. Thus, $? of the operating loss and $? of the capital loss is deducted currently by Freiberg.