A Shareholder's Deduction for Ordinary Losses and Separately Stated Items

question 39

True/False

A shareholder's deduction for ordinary losses and separately stated items cannot exceed his basis for the S corporation stock plus the debt basis for the shareholder loans made to the corporation and corporate-level liabilities personally guaranteed by the shareholder.

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Definitions:

Manufacturing

The process of producing goods on a large scale using labor, machines, tools, and chemical or biological processing or formulation.

Samuel Slater

An industrialist known as the "Father of the American Industrial Revolution" for his role in bringing British textile technology to America.

First Factory

Referenced commonly as the birthplace of the industrial revolution, a facility where goods are manufactured or processed, with the first factories emerging in the 18th century.

Cotton Gin

A machine invented by Eli Whitney in 1793 that quickly and efficiently removes seeds from cotton fibers, revolutionizing the cotton industry.