Rex and Marsha Each Own 50 Percent of the Grandiflora

question 80

Essay

Rex and Marsha each own 50 percent of the Grandiflora Corporation, an S corporation with a calendar tax year. At the beginning of the tax year, Marsha and Rex both have a basis in the stock of the corporation of $25,000. On June 30, 2016, Rex sells his interest in the corporation to George for $200,000, and for 2016 the Grandiflora Corporation has a loss of $90,000.
a.Calculate the amount of the corporation's loss that may be deducted by Rex on his 2016 tax return.
b.Calculate the amount of the corporation's loss that may be deducted by George on his 2016 tax return.
c.Calculate the amount of the corporation's loss that may be deducted by Marsha on her 2016 tax return.

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Definitions:

Clumped Dispersion

A distribution pattern of organisms within a population where individuals are found in tight groups, influenced by social behavior or resource availability.

Population Dispersion

The way individuals within a population are spaced across their habitat, which can be categorized as uniform, random, or clumped according to patterns of spacing.

Exponential Growth

A pattern of data that shows greater increases over time, creating a curve that represents a constant doubling rate.

Arithmetic Growth

A form of growth characterized by a constant increase by a fixed amount in a series over equal time periods.