Ask Question
29 April, 10:39

Suppose that at the beginning of 2019 Jamaal's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $16,000 loan he made to the S corporation, and he has a $11,000 suspended loss from the S corporation. In 2019, Jamaal contributed $14,000 to the S corporation, and the S corporation had ordinary income of $10,000. Assume that Jamaal owns 40 percent of the S corporation. How much net income or loss does Jamaal report this year from the S corporation?

+1
Answers (1)
  1. 29 April, 12:49
    0
    -$7,000

    Explanation:

    Net loss reported by Jamaal this year from the S corporation:

    = Ordinary income - suspended loss from the S corporation

    = (40 percent of the S corporation * Ordinary income) - suspended loss from the S corporation

    = (40% * $10,000) - $11,000

    = $4,000 - $11,000

    = - $7,000

    Jamaal may deduct the $11000 loss carryover against his debt basis,

    which was increased by his $14,000 contribution,

    and his $4,000 share of S corporation income.
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Suppose that at the beginning of 2019 Jamaal's basis in his S corporation stock is $0, he has a $0 debt basis associated with a $16,000 ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers