Rex and Marsha each own 50 percent of the Grandiflora Corporation, an S corporation with a calendar tax year. At the beginning of the tax year, Marsha and Rex both have a basis in the stock of the corporation of $25,000. On June 30, 2015, Rex sells his interest in the corporation to George for $200,000, and for 2015 the Grandiflora Corporation has a loss of $90,000.
a.Calculate the amount of the corporation's loss that may be deducted by Rex on his 2015 tax return.
b.Calculate the amount of the corporation's loss that may be deducted by George on his 2015 tax return.
c.Calculate the amount of the corporation's loss that may be deducted by Marsha on her 2015tax return.

Question

Quizplus · Accepted Answer

The Answer of Rex and Marsha each own 50 percent of the Grandiflora Corporation, an S corporation with a calendar tax year. At the beginning of the tax year, Marsha and Rex both have a basis in the stock of the corporation of $25,000. On June 30, 2015, Rex sells his interest in the corporation to George for $200,000, and for 2015 the Grandiflora Corporation has a loss of $90,000.
a.Calculate the amount of the corporation's loss that may be deducted by Rex on his 2015 tax return.
b.Calculate the amount of the corporation's loss that may be deducted by George on his 2015 tax return.
c.Calculate the amount of the corporation's loss that may be deducted by Marsha on her 2015tax return.

Rex and Marsha Each Own 50 Percent of the Grandiflora