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Sonny and Cher equally own Song Corporation, an S corporation. Each has a $25,000 stock basis at the beginning of the year. Song Corporation has
Sonny and Cher equally own Song Corporation, an S corporation. Each has a $25,000 stock basis at the beginning of the year. Song Corporation has a $50,000 mortgage on its balance sheet, as well as a note payable to Cher for $30,000. During the current year, Song Corporation reports an ordinary loss of $100,000.
What is each shareholder's basis at the end of the year? | ||
What is the loss each shareholder will report on their tax return |
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