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Alan owns stock in two S corporations, Cyan and Verde. He actively participates in the management of Cyan but is only a passive investor in
Alan owns stock in two S corporations, Cyan and Verde. He actively participates in the management of Cyan but is only a passive investor in Verde. Both Cyan and Verde anticipate a loss this year. Alans basis in the stock of both corporations is $0. If Alan plans on making a capital contribution to at least one of the corporations this year, which firm should it be if his objective is to increase his chances of deducting the loss allocated to him from the entity? Why?
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