Question
Chandra was the sole shareholder of Pet Emporium, which was originally formed as an S corporation. When Pet Emporium terminated its S election on August
Chandra was the sole shareholder of Pet Emporium, which was originally formed as an S corporation. When Pet Emporium terminated its S election on August 31, 2018, Chandra had a stock basis and an at-risk amount of $0. Chandra also had a suspended loss from Pet Emporium of $9,200.
What amount of the suspended loss is Chandra allowed to deduct, and what is her basis in her Pet Emporium stock at the end of the post-termination transition period under the following alternative scenarios (assume Pet Emporium files for an extension to file its tax returns)? (Leave no answer blank. Enter zero if applicable.)
a. Chandra makes capital contributions of $7,300 on August 30, 2019, and $4,240 on September 14, 2019.
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