Question

Questions 22 and 23 are based on the following: is a shareholder in X co., an S corporation. In 20X4, A's share of X co.'s net operating loss is $20,000. On 12/31/X4 A has a basis in his X co, stock of $15,000 before accounting for the net operating loss. A also has a loan due from X co. for which he has a $7,000 basis. In 20X3, A'S Share of X co's income is $10,000. 22. In 20X4, A may deduct on his return a: a. $20,000 loss b. $15,000 loss $22,000 loss None of the above 23. 24. As of 1/1/X6, A's basis in his stock and debt is, respectively: 0 and 0 $5,000 and $7,000 c. $10,000 and 0 d. None of the above A owned 40 percent of X co. (an S corporation) for 200 days during 20X9. A owned 20 percent of X co. for the remaining 165 days in 20X9. X co. is a calendar year taxpayer and in 20X9 it had $365,000 of capital gains. A's share of X co.'s capital gains for 20X9 is: $ 73,000 $126,000 $113,000 None of the above

Answer 1

22. a. 20,000 loss because his share of loss is 20,000.

23. a. 0 and 0 respectively, there is only a balance which is due from X but not which is due to X

24. c. 113,000 200,000 x 40% for 200 days = 80,000 and 165,000 x 20% for 165 days = 33,000........80,000 + 33,000 = 113,000.