Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. on january 1, 2015, leo paid $15,000 for 5 percent

On January 1, 2015, Leo paid $15,000 for 5 percent of the stock in BLS,...

90.2K

Verified Solution

Question

Accounting

On January 1, 2015, Leo paid $15,000 for 5 percent of the stock in BLS, an S corporation. In November, he loaned $8,000 to BLS in return for a promissory note. BLS generated a $600,000 operating loss in 2015. BLS generated $408,000 ordinary business income in 2016.

a. How much of Leos share of this income is included in his 2016 taxable income?

b. Compute Leos basis in his BLS stock and his BLS note at the end of 2016.

BLS Stock BLS Note

Adjusted Basis ? ?

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students