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Maria is a sole shareholder in Austin Corporation, an S corporation. At the beginning of last year, her basis in her Austin stock was $215,000.
Maria is a sole shareholder in Austin Corporation, an S corporation. At the beginning of last year, her basis in her Austin stock was $215,000. Austin also had debt of $50,000 it owed to unrelated parties. During last year she loaned Austin $150,000, and it generated a loss of $240,000. What was her basis in the stock and the loan at the end of last year? Assume the facts above. Suppose that in the current year the income of Austin is $140,000. What would be Marias basis in the stock and the loan at the end of the current year?
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