charizard owns a 35 percent interest in Umass Corporation, an S corporation. The
ID: 2560573 • Letter: C
Question
charizard owns a 35 percent interest in Umass Corporation, an S corporation. The corporation has run into some difficulties recently and Charizard loaned it $10,000. At the beginning of the year, Charizard basis in his stock was $25,000. a. What is Charizard’s basis in his stock and debt at the end of the year if the corporation reports losses of $60,000? b. What is Charizard’s basis in his stock and debt at the end of the year if the corporation reports losses of $90,000? c. What is Charizard’s basis in his stock and debt at the end of the year if the corporation reports losses of $120,000?
Explanation / Answer
Step 1:What is Charizard’s basis in his stock and debt at the end of the year if the corporation reports losses of $60,000.
Step 2:What is Charizard’s basis in his stock and debt at the end of the year if the corporation reports losses of $90,000?
Sl No Particulars Amount 1 Basis in Stock $25,000 2 Less:Allocated Losses($60000*35%) $21,000 3 Stock Basis at the end of the year $4000 4 Debt basis at the end of the year $10,000Related Questions
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