On January 1 of this year (assume not a leap year),Anne bought 50% of a calendar-year S corporation.Anne purchased the remaining 50% on July 1 (day 181 of the year).Anne's adjusted basis in the stock is $277,000 before any basis adjustments are taken into account.For this year,the corporation had a net operating loss of $365,000.What is the amount of the corporation's loss that Anne can deduct on her current individual income tax return?

Question

Quizplus · Accepted Answer

Anne can deduct 50% of the corporation's loss for the period she owned the stock, which is 181/365 of the year. So, Anne can deduct 181/365 * $365,000 = $274,500.

On January 1 of This Year (Assume Not a Leap