$10,720 at the beginning of the year and that at the beginning of year 1 Sunita loaned Bikes-R-Us $3,180. In year 2, Bikes-R-Us ported ordinary income of $12,360. ote: Leave no answer blank. Enter zero if applicable. equired: What amount is Sunita allowed to deduct in year 1? 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? a. Deductible amount b. Stock basis c. Debt basis Year 1 Year 2
$10,720 at the beginning of the year and that at the beginning of year 1 Sunita loaned Bikes-R-Us $3,180. In year 2, Bikes-R-Us ported ordinary income of $12,360. ote: Leave no answer blank. Enter zero if applicable. equired: What amount is Sunita allowed to deduct in year 1? 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? a. Deductible amount b. Stock basis c. Debt basis Year 1 Year 2
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
T2.
Transcribed Image Text:Sunita is a one-third owner in Bikes-R-Us, an S corporation that experienced a $46,800 loss this year (year 1). Assume her stock basis
is $10,720 at the beginning of the year and that at the beginning of year 1 Sunita loaned Bikes-R-Us $3,180. In year 2, Bikes-R-Us
reported ordinary income of $12,360.
Note: Leave no answer blank. Enter zero if applicable.
Required:
a. What amount is Sunita allowed to deduct in year 1?
b. What are her stock and debt bases in the corporation
at the end of year 1?
c. What are her stock and debt bases in the corporation at the end of year 2?
a. Deductible amount
b. Stock basis
c. Debt basis
Year 1
Year 2
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