. As of January 1, 2020, Abigail, Bobby, and Claudia each has a basis in Lafter stock of $15.000 and a debt basis of So. On January 1, the stock basis is also the at-risk amount for each shareholder Bobby and Claudia also are passive owners in Aggressive LLC, which allocated business income of $14,000 to each of them in 2020. Neither has any other source of passive income (besides Lafter for Claudia) On March 31, 2020, Abigail lends $5,000 of her own money to Lafter. Anticipating the need for basis to deduct a loss, on April 4, 2020 Bobby takes out a 510,000 loan to make a $10,000 contribution to Lafter. Bobby uses his automobile ($12,000 fair market value) as the sole collateral for his loan (nonrecourse). Lafter has an accumulated adjustments account balance of $45.000 as of January 1, 2020. Lafter has corporation earnings and profits of $15,000 as of January 1, 2020. During 2020. Lafter reports a business loss of $75,000, computed as follows: OOK int Sales revenue Cost of goods sold Salary to Abigail Salary to Bobby Business (loss) $90,000 (85,000) (40,000) (40.00 $ (75,000) Latter also reported $12,000 of tax-exempt interest income. . During 2021, Lafter made several changes to its business approach and reported $18,000 of business income, computed as follows: Sales revenue Cost of goods sold Salary to Abigail Salary to Bobby Harketing expense Business Incone $ 200,000 (90,000) (45,000) (45,000) (10.000) $ 18,00 Lafter also reported a long-term capital gain of $24,000 in 2021. Lafter made a cash distribution on July 1, 2021. of $20,000 to each shareholder (For all requirements, do not round your intermediate calculations. Round your final answer to the nearest whole dollar amount Leave no answer blank. Enter zero if applicable.) Required: (For all requirements, do not round your intermediate calculations, Round your final answer to the nearest whole dollar amount Leave no answer blank. Enter zero if applicable.) Required: 0-1. What amount of Latter's 2020 business loss of $75,000 are Abigail, Bobby, and Claudia allowed to deduct on their individual tax retums? 0-2. What are each owner's stock basis and debt basis (if applicable) and each owner's at-risk amount with respect to the investment in Lafter at the end of 2020? b. What amount of gain/income does each shareholder recognize from the cash distribution on July 1, 2021? a1 a2 Answer is complete but not entirely correct. Abigail Bobby Claudia Deductible amount $ 18,000 $ 3,000 $ 8.000 Stock basis 5 os 4.000 0 Debt basis $ 0$ 0$ 0 At-risk amount $ OS 03 Dividend income $ 5,000 $ 5,000 $ 5,000 Long-term capital 5 5,000 $ 05 1.000 gain b . As of January 1, 2020, Abigail, Bobby, and Claudia each has a basis in Lafter stock of $15.000 and a debt basis of So. On January 1, the stock basis is also the at-risk amount for each shareholder Bobby and Claudia also are passive owners in Aggressive LLC, which allocated business income of $14,000 to each of them in 2020. Neither has any other source of passive income (besides Lafter for Claudia) On March 31, 2020, Abigail lends $5,000 of her own money to Lafter. Anticipating the need for basis to deduct a loss, on April 4, 2020 Bobby takes out a 510,000 loan to make a $10,000 contribution to Lafter. Bobby uses his automobile ($12,000 fair market value) as the sole collateral for his loan (nonrecourse). Lafter has an accumulated adjustments account balance of $45.000 as of January 1, 2020. Lafter has corporation earnings and profits of $15,000 as of January 1, 2020. During 2020. Lafter reports a business loss of $75,000, computed as follows: OOK int Sales revenue Cost of goods sold Salary to Abigail Salary to Bobby Business (loss) $90,000 (85,000) (40,000) (40.00 $ (75,000) Latter also reported $12,000 of tax-exempt interest income. . During 2021, Lafter made several changes to its business approach and reported $18,000 of business income, computed as follows: Sales revenue Cost of goods sold Salary to Abigail Salary to Bobby Harketing expense Business Incone $ 200,000 (90,000) (45,000) (45,000) (10.000) $ 18,00 Lafter also reported a long-term capital gain of $24,000 in 2021. Lafter made a cash distribution on July 1, 2021. of $20,000 to each shareholder (For all requirements, do not round your intermediate calculations. Round your final answer to the nearest whole dollar amount Leave no answer blank. Enter zero if applicable.) Required: (For all requirements, do not round your intermediate calculations, Round your final answer to the nearest whole dollar amount Leave no answer blank. Enter zero if applicable.) Required: 0-1. What amount of Latter's 2020 business loss of $75,000 are Abigail, Bobby, and Claudia allowed to deduct on their individual tax retums? 0-2. What are each owner's stock basis and debt basis (if applicable) and each owner's at-risk amount with respect to the investment in Lafter at the end of 2020? b. What amount of gain/income does each shareholder recognize from the cash distribution on July 1, 2021? a1 a2 Answer is complete but not entirely correct. Abigail Bobby Claudia Deductible amount $ 18,000 $ 3,000 $ 8.000 Stock basis 5 os 4.000 0 Debt basis $ 0$ 0$ 0 At-risk amount $ OS 03 Dividend income $ 5,000 $ 5,000 $ 5,000 Long-term capital 5 5,000 $ 05 1.000 gain b
