In Applying the Basis Limitation on the Deduction of S

question 88

Multiple Choice

In applying the basis limitation on the deduction of S corporation losses,which of the following statements is true?

• A)The basis of a shareholder's interest in an S corporation,for purposes of limiting deductibility of losses,is computed in the same manner as a partner's basis in a partnership interest.
• B)A shareholder is permitted to deduct losses against basis in any debt obligation from the S corporation to the shareholder.
• C)If a shareholder's tax basis in a debt obligation is reduced,any gain resulting from the repayment of that obligation is considered ordinary income.
• D)All of the above statements are false.

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Definitions:

Personnel Decisions

Actions relating to the management and direction of employees within an organization, including hiring, promotion, and termination.

Training Needs

The identification of gaps in workforce competencies that, when addressed through training, can improve individual and organizational performance.

Criterion Deficiency

The absence of important elements in the evaluation criteria that fails to capture the full spectrum of job performance.

Quantifiable Performance

Performance that can be measured or evaluated using numbers or metrics.