Barrie owns 100% of a Subchapter S corporation and her basis in the stock is $200,000.In the current year,the corporation reports an ordinary loss of $250,000 and interest income of $20,000.How much of the loss can Barrie claim in the current year?

Question

Quizplus · Accepted Answer

As Barrie owns 100% of the corporation, she can claim the entire loss of $250,000, but she is limited to the amount of her basis in the corporation, which is $200,000. However, she can also claim the interest income of $20,000, which increases her basis to $220,000. Therefore, the maximum amount of loss that Barrie can claim in the current year is $220,000.

Barrie Owns 100% of a Subchapter S Corporation and Her