Jackson is the sole owner of JJJ Corp.(an S corporation).At the end of 2019, Jackson's basis in his JJJ stock and his at-risk amount were $0.Jackson also had a $10,000 suspended ordinary business loss (suspended at the tax-basis and at-risk level).JJJ's S election was terminated effective the end of the day on December 31, 2019.If Jackson contributes $6,000 cash to JJJ on July 1, 2020, and $3,000 cash on January 5, 2021, how much of his $10,000 suspended loss will he be allowed to deduct and how much disappears unused?

Question

Quizplus · Accepted Answer

The Answer of Jackson is the sole owner of JJJ Corp.(an S corporation).At the end of 2019, Jackson's basis in his JJJ stock and his at-risk amount were $0.Jackson also had a $10,000 suspended ordinary business loss (suspended at the tax-basis and at-risk level).JJJ's S election was terminated effective the end of the day on December 31, 2019.If Jackson contributes $6,000 cash to JJJ on July 1, 2020, and $3,000 cash on January 5, 2021, how much of his $10,000 suspended loss will he be allowed to deduct and how much disappears unused?

Jackson Is the Sole Owner of JJJ Corp