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Problem 11-56 (LO 11-4) Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $47,700 loss this year (year 1). Assume her
Problem 11-56 (LO 11-4)
Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $47,700 loss this year (year 1). Assume her stock basis is $11,080 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,270. In year 2, Bikes-R-Usreported ordinary income of $12,540.(Leave no answer blank. Enter zero if applicable.)
Required:
- What amount is Jessica allowed to deduct in year 1 and year 2?
- What are her stock and debt bases in the corporation at the end of year 1?
- What are her stock and debt bases in the corporation at the end of year 2
Year 1Year 2a.Deductible amount
$
14,350b-c.Stock basis
$
0
$
0Debt basis
$
0
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