Parker Is a 100 Percent Shareholder of Johnson Corp

question 107

Essay

Parker is a 100 percent shareholder of Johnson Corp.(an S corporation).At the beginning of 2019, Parker's basis in his Johnson Corp.stock was $14,000.During 2019, Parker loaned $20,000 to Johnson Corp.and Johnson Corp.reported a $25,000 ordinary business loss and no separately stated items.In 2020, Johnson Corp.reported $8,000 of ordinary business income.
a.How much of the $25,000 ordinary loss allocated to Parker clears the tax-basis hurdle for deductibility in 2019?
b.What is Parker's stock and debt basis at the end of 2019?
c.What is Parker's stock and debt basis at the end of 2020?

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Definitions:

Neuron's Cell Body

The part of a neuron that contains the nucleus and is responsible for the cell's metabolic activities.

Neurotransmitters

Chemical messengers in the body that transmit signals from one neuron to another across synapses.

Differentiation

refers to the process of distinguishing or becoming distinct, often used in biology to describe cells becoming specialized, and in education to describe tailoring instruction to meet individual learner needs.

Neuron

A neuron is a specialized cell in the nervous system that transmits information to other nerve cells, muscle, or gland cells, fundamental to nervous system functions.