Suppose at the Beginning of 2017,Jamaal's Basis in His S

question 65

Multiple Choice

Suppose at the beginning of 2017,Jamaal's basis in his S corporation stock was $27,000 and that Jamaal has directly loaned the S corporation $10,000.During 2017,the S corporation reported an $80,000 ordinary business loss and no separately stated items.After any loss deductions this year,what is Jamaal's stock and debt basis at the end of the year if Jamaal is a 50% shareholder of the S corporation?

• A) $27,000 stock basis; 10,000 debt basis.
• B) $0 stock basis; $10,000 debt basis.
• C) $67,000 stock basis; $10,000 debt basis.
• D) -$13,000 stock basis; $10,000 debt basis.
• E) None of the choices are correct.

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Definitions:

Hand Assembly

The process of putting together components primarily using manual labor and hand tools.

Extension Lines

Lines in technical drawing that extend from the object to the dimension line, indicating the boundaries of a dimension.

Decimal-Inch

A unit of measurement used in the United States, denoting inches with decimals for precision in engineering and manufacturing.

Decimal Places

The number of digits to the right of the decimal point in a number, indicating the precision of the measurement.