Pass-Through S Corporation Losses Can Reduce the Basis in a Shareholder's

question 63

True/False

Pass-through S corporation losses can reduce the basis in a shareholder's loan to the entity, but distributions do not reduce loan basis.

---

Definitions:

Commercial Impracticability

A doctrine allowing parties to suspend or terminate contractual obligations when unexpected events fundamentally alter the nature of the contract, making performance unfeasible.

Increased Production Costs

A scenario where the expenses associated with producing goods or services rise, potentially affecting prices and profitability.

Perfect Tender Rule

A principle in commercial law that requires the seller to deliver goods to the buyer that exactly match the terms and quality specifications of the contract.

Sale Of Goods

The act of transferring ownership of tangible personal property from a seller to a buyer for a price.