orporation generates a net loss of $100,000 in the current year. Mia is a 50% owner of S Corporation. Assume the S Corporation is a passive activity for Mia. Mia also owns 10% of another passive activity that generated $100,000 of income. Also, assume that Mia’s stock basis in S corporation is $25,000 and her at-risk basis in S Corporation is $20,000. Based on this information, how much of the loss allocated to Mia from the S Corporation, will Mia actually be able to deduct on her personal return. a. $25,000. b. $50,000. c. $10,000. d. $20,000.
orporation generates a net loss of $100,000 in the current year. Mia is a 50% owner of S Corporation. Assume the S Corporation is a passive activity for Mia. Mia also owns 10% of another passive activity that generated $100,000 of income. Also, assume that Mia’s stock basis in S corporation is $25,000 and her at-risk basis in S Corporation is $20,000. Based on this information, how much of the loss allocated to Mia from the S Corporation, will Mia actually be able to deduct on her personal return. a. $25,000. b. $50,000. c. $10,000. d. $20,000.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
S Corporation generates a net loss of $100,000 in the current year. Mia is a 50% owner of S Corporation. Assume the S Corporation is a passive activity for Mia. Mia also owns 10% of another passive activity that generated $100,000 of income. Also, assume that Mia’s stock basis in S corporation is $25,000 and her at-risk basis in S Corporation is $20,000. Based on this information, how much of the loss allocated to Mia from the S Corporation, will Mia actually be able to deduct on her personal return.
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a. $25,000. |
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b. $50,000. |
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c. $10,000. |
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d. $20,000. |
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