Question
Bobs share of an S corporation loss is $50,000, and his basis in his stock on December 31, Year 1, is $25,000. He loaned the
Bob’s share of an S corporation loss is $50,000, and his basis in his stock on December 31, Year 1, is $25,000. He loaned the S corporation $10,000 during the year, which has not been repaid.
What maximum amount of loss (before passive and at-risk limitations) can Bob deduct on his Year 1 tax return?
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In an S corporation context a shareholders ability to deduct losses is subject to certain limitations including the basis in the stock passive activity loss rules and atrisk rules Lets break down the information provided Basis in Stock Bobs basis in his S corporation stock is 25000 Loan to S Corporation Bob loaned the S corporation 10000 during the year Given this information lets calculate the maximum amount of loss that Bob can deduct on his Year 1 tax return Basis Limitation The first limitation ...
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516
