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im stuck. i keep getting the wrong thing On January 1, Year 1, Ginger, an individual, paid $27,000 for 7 percent of the stock in
im stuck. i keep getting the wrong thing
On January 1, Year 1, Ginger, an individual, paid $27,000 for 7 percent of the stock in Root Corp, an S corporation. In November Year 1 , he loaned $9,000 to Root Corp. In return for a promissory note. Root Corp. generated a $720,000 operating loss in Yeat 1 . Root Corp. generated $420,000 ordinaty business income in Year 2. Required: a. How much of Ginger's share of this income is included in his Year 2 taxable incorhe? b. Compute Ginger's basis in his Root Corp. stock and his Root Corp. note at the end of Year 2 c. How would your answers to parts a and b change if Root Corp's ordinary business income was only $232,000 ? Complete this question by entering your answers in the tabs below. a. How much of Ginger's share of this income is induded in his Year 2 taxable income? b. Compute Ginger's basis in his foot Corp. stock and his Root Corp. note at the end of Year 2. How would your answers to parts a and b change if Root Corp.'s ordinary business income was only $232,000 Step by Step Solution
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