ackson is the sole owner of JJJ Corp. (an S corporation). At the beginning of 2019,...
ackson is the sole owner of JJJ Corp. (an S corporation). At the beginning of 2019, Jackson's basis in his JJJ stock was $8,000. For 2019, JJJ reported a ($30,000) ordinary business loss (not a passive loss) and $4,000 of long-term capital gains. Assuming Jackson's tax basis and his at-risk amount are the same, what is Jackson's stock basis at the end of the year and how much of the ordinary business loss is he allowed to deduct in 2019?
Homework Answers
| Jackson's stock basis at the end of the year ($8,000 stock basis + $4,000 long-term capital gain - $12,000 ordinary business loss) | $0.00 |
| Ordinary business loss is he allowed to deduct in 2019 | $12,000.00 |
| Jackson's tax basis and his at risk amount are the same before considering the ordinary loss | |
| The remaining $18,000 loss is suspended. |
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