In the past several years, Shakira had loaned money to Shakira Incorporated (an S corporation) to help the corporation keep afloat in a downturn. Her stock basis in the S corporation is now $0, and she has deducted $42,750 in losses, reducing her debt basis from $142,500 to $99,750. Things appear to be turning around this year, and Shakira Incorporated repaid Shakira $28,500 of the $142,500 outstanding loan. What is Shakira's income, if any, on the partial loan repayment?
In the past several years, Shakira had loaned money to Shakira Incorporated (an S corporation) to help the corporation keep afloat in a downturn. Her stock basis in the S corporation is now $0, and she has deducted $42,750 in losses, reducing her debt basis from $142,500 to $99,750. Things appear to be turning around this year, and Shakira Incorporated repaid Shakira $28,500 of the $142,500 outstanding loan. What is Shakira's income, if any, on the partial loan repayment?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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In the past several years, Shakira had loaned money to Shakira Incorporated (an S corporation) to help the corporation keep afloat in a downturn. Her stock basis in the S corporation is now $0, and she has deducted $42,750 in losses, reducing her debt basis from $142,500 to $99,750. Things appear to be turning around this year, and Shakira Incorporated repaid Shakira $28,500 of the $142,500 outstanding loan. What is Shakira's income, if any, on the partial loan repayment?
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