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safezone safezone
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7 years ago
Jeff owns 50% of an S corporation's stock with a basis in his stock of $50,000 on January 1. In addition, the S corporation owes Jeff $30,000 on January 1. The debt has a basis of $30,000 and is evidenced by a note. The S corporation reports an ordinary loss of $150,000 for the current year. The next year, it reports ordinary income of $20,000. On January 1 of the third year, the note is repaid. Due to the repayment of the note, Jeff must report what?
Textbook 
Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts

Prentice Hall's Federal Taxation 2014 Corporations, Partnerships, Estates & Trusts


Edition: 27th
Authors:
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That's not philosophy, it's geometry
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genflynngenflynn
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#1
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7 years ago
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More solutions for this book are available here
1
We have the most crude accounting tools. It's tragic because our accounts and our national arithmetic doesn't tell us the things that we need to know.

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wrote...
#2
6 years ago
Quote from: genflynn (7 years ago)
Stock   Debt
1/1 Basis
Minus: Year 1 loss
12/31 Basis
Plus: Year 2 income
12/31 Basis

Amount realized
Minus: adjusted basis
Capital gain   $50,000
( 50,000)
-0-
-0-
 -0-   $30,000
 ( 25,000)
 $ 5,000
   10,000
 $15,000

$30,000
 ( 15,000)
$15,000
wrote...
#3
4 years ago
Thank you.
wrote...
#4
3 years ago
thank you
wrote...
#5
3 years ago
Thank you
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