Parker is a 100percent shareholder of Johnson Corporation (an S corporation). At the beginning of 2020, Parker's basis in his Johnson Corporation stock was $14,000. During 2020, Parker loaned $20,000 to Johnson Corporation and Johnson Corporation reported a $25,000 ordinary business loss and no separately stated items. In 2021, Johnson corporation reported $8,000 of ordinary business income.
a. How much of the $25,000 ordinary loss allocated to Parker clears the tax-basis hurdle for deductibility in 2020?
b. What is Parker's stock and debt basis at the end of 2020?
c. What is Parker's stock and debt basis at the end of 2021?

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The Answer of Parker is a 100percent shareholder of Johnson Corporation (an S corporation). At the beginning of 2020, Parker's basis in his Johnson Corporation stock was $14,000. During 2020, Parker loaned $20,000 to Johnson Corporation and Johnson Corporation reported a $25,000 ordinary business loss and no separately stated items. In 2021, Johnson corporation reported $8,000 of ordinary business income.
a. How much of the $25,000 ordinary loss allocated to Parker clears the tax-basis hurdle for deductibility in 2020?
b. What is Parker's stock and debt basis at the end of 2020?
c. What is Parker's stock and debt basis at the end of 2021?

Parker Is a 100percent Shareholder of Johnson Corporation (An S