Sunita is a one-third owner in Bikes-R-Us, an S corporation that experienced a $50,700 loss this year (year 1). Assume her stock basis is $12,280 at the beginning of the year and that at the beginning of year 1 Sunita loaned Bikes-R-Us $3,570. In year 2, Bikes-R-Us reported ordinary income of $13,140. Note: Leave no answer blank. Enter zero if applicable. Required: 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?
Sunita is a one-third owner in Bikes-R-Us, an S corporation that experienced a $50,700 loss this year (year 1). Assume her stock basis is $12,280 at the beginning of the year and that at the beginning of year 1 Sunita loaned Bikes-R-Us $3,570. In year 2, Bikes-R-Us reported ordinary income of $13,140. Note: Leave no answer blank. Enter zero if applicable. Required: 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?
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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Question
Sunita is a one-third owner in Bikes-R-Us, an S corporation that experienced a $50,700 loss this year (year 1). Assume her stock basis is $12,280 at the beginning of the year and that at the beginning of year 1 Sunita loaned Bikes-R-Us $3,570. In year 2, Bikes-R-Us reported ordinary income of $13,140.
Note: Leave no answer blank. Enter zero if applicable.
Required:
- 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?
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