A owns ABC, Inc., an S corporation. A's stock basis was $10,000 at the beginning of year 1 and he loaned ABC $3,000 on Jan. 1. ABC has loss of $15,000 for the year. 30. How much of the loss can A deduct in year 1. In year 2 ABC has income of $12,000. 31. What is A's stock basis at the end of year 2. 32. What is A's loan basis at the end of year 2. 33. In year 5 when A's stock basis was $25,000 and his loan basis was $10,000, ABC distributed $30,000 to him. What is the amount and character of any gain A must recognize on the distribution?

A owns ABC, Inc., an S corporation. A's stock basis was $10,000 at the beginning of year 1 and he loaned ABC $3,000 on Jan. 1. ABC has loss of $15,000 for the year. 30. How much of the loss can A deduct in year 1. In year 2 ABC has income of $12,000. 31. What is A's stock basis at the end of year 2. 32. What is A's loan basis at the end of year 2. 33. In year 5 when A's stock basis was $25,000 and his loan basis was $10,000, ABC distributed $30,000 to him. What is the amount and character of any gain A must recognize on the distribution?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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