Jessica is a one-third owner in bikes-r-us an s corporation, Ask an Expert

Finance

Jessica is a one-third owner in Bikes-R-Us, an S corporation that experienced a $45,000 loss this year (year 1). Assume her stock basis is $10,000 at the beginning of the year and that at the beginning of year 1 Jessica loaned Bikes-R-Us $3,000. In year 2, Bikes-R-Us, reported ordinary income of $12,000

a. What amount is Jessica allowed to deduct in year 1?

b. What are her stock and debt bases in the corporation at the end of year 1?

c. What are her stock and debt bases in the corporation at the end of year 2?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M91814684

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