Jackson is the sole owner of JJJ corp. (an S corporation). At the end of 2016, Jackson's basis in his JJJ stock and his at risk amount was $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, 2016. If Jackson contributes $6,000 cash to JJJ on July 1, 2017 and $3,000 cash on January 5, 2018, 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 2016, Jackson's basis in his JJJ stock and his at risk amount was $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, 2016. If Jackson contributes $6,000 cash to JJJ on July 1, 2017 and $3,000 cash on January 5, 2018, 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