Shelley owns a 25% interest in a qualifying S corporation. Shelley's basis in the stock was $15,000 at the beginnin year. Shelley made no capital contributions and received no distributions during the year. Shelley loaned the S corporation $20,000 this year. The S corporation incurred a $160,000 ordinary loss this year.
a. What are the amounts of Shelley's deduction and carryover of the unused loss for the year?
b. What is the amount of Shelley's basis in the stock at the end of year one?
c. If the S Corporation earned net income of $200,000 in year two, what is the amount of Shelley's stock basis at end of year two?

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The Answer of Shelley owns a 25% interest in a qualifying S corporation. Shelley's basis in the stock was $15,000 at the beginnin year. Shelley made no capital contributions and received no distributions during the year. Shelley loaned the S corporation $20,000 this year. The S corporation incurred a $160,000 ordinary loss this year.
a. What are the amounts of Shelley's deduction and carryover of the unused loss for the year?
b. What is the amount of Shelley's basis in the stock at the end of year one?
c. If the S Corporation earned net income of $200,000 in year two, what is the amount of Shelley's stock basis at end of year two?

Shelley Owns a 25% Interest in a Qualifying S Corporation