Prior to BJ Corporations year-end, its sole shareholder comes to you for advice. BJ is an established
Question:
Prior to BJ Corporation’s year-end, its sole shareholder comes to you for advice.
BJ is an established S corporation that was profitable until two years ago when the economy faltered. Due to distributions and losses passed through in prior years, the shareholder’s basis in the S corporation is only $10,000. He anticipates that the corporation will have a loss of $50,000 in the current year. His previous accountant, who retired this year, had mentioned something to him about losses not being deductible if he did not have stock basis.What are the shareholder’s alternatives? Make a list of questions you would ask the shareholder to assist you in selecting between alternatives.
AppendixLO1
Step by Step Answer:
Taxation For Decision Makers 2008
ISBN: 9780324654110
2nd Edition
Authors: Shirley Dennis-Escoffier, Karen A. Fortin