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Bob and Sally, unmarried taxpayers, each owned 50% of Lostalot, Inc., an S corporation. The corporation had a $50,000 operating loss for the tax year
Bob and Sally, unmarried taxpayers, each owned 50% of Lostalot, Inc., an S corporation. The corporation had a $50,000 operating loss for the tax year ending December 31, 2002. As of 12-31-01, Bobs basis in his stock was $15,000 and Sallys was $5,000. During the 2002 tax year, Sally mortgaged her home for $25,000 and loaned the money to the corporation. Although not personally liable, Bob told her not to worry and that if anything happened, he would help pay the mortgage debt. Calculate the amount of allowable loss deduction each shareholder would be able to recognize on their individual 2002 tax returns. Bob: $25,000 and Sally $25,000. Bob: $15,000 and Sally $5,000. Bob: $15,000 and Sally $30,000. Bob: $15,000 and Sally $25,000
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