Business, 16.05.2020 10:57 imoreno8412

Birch Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, James, who has operated it as an S corporation since its inception. Last year, James made a direct loan to Birch Corp. in the amount of $7,200. Birch Corp. has paid the interest on the loan but has not yet paid any principal. (Assume the loan qualifies as debt for tax purposes.) For the year, Birch experienced a $25,500 business loss.
What amount of the loss clears the tax-basis limitation, and what is James’s basis in his Birch Corp. stock and Birch Corp. debt in each of the following alternative scenarios?
a. At the beginning of the year, James's basis in his Birch Corp. stock was $47,600 and his basis in his Birch Corp. debt was $7,200.
Amount of loss clearing tax basis limitation
Basis in stock
Basis in debt
b. At the beginning of the year, James's basis in his Birch Corp. stock was $9,300 and his basis in his Birch Corp. debt was $7,200.
Amount of loss clearing tax basis limitation
Basis in stock
Basis in debt
c. At the beginning of the year, James's basis in his Birch Corp. stock was $0 and his basis in his Birch Corp. debt was $7,200.
Amount of loss clearing tax basis limitation
Basis in stock
Basis in debt

Answers: 3

Show answers

Other questions on the subject: Business

Business, 22.06.2019 05:10, Kaitneedshelps

1. descriptive statistics quickly describe large amounts of data can predict future stock returns with surprising accuracy statisticians understand non-numeric information, like colors refer mainly to patterns that can be found in data 2. a 15% return on a stock means that 15% of the original purchase price of the stock returns to the seller at the end of the year 15% of the people who purchased the stock will see a return the stock is worth 15% more at the end of the year than at the beginning the stock has lost 15% of its value since it was originally sold 3. a stock purchased on january 1 cost $4.35 per share. the same stock, sold on december 31 of the same year, brought in $4.75 per share. what was the approximate return on this stock? 0.09% 109% 1.09% 9% 4. a stock sells for $6.99 on december 31, providing the seller with a 6% annual return. what was the price of the stock at the beginning of the year? $6.59 $1.16 $7.42 $5.84

Answers: 3

continue

Business, 22.06.2019 06:40, haleyturkey

Depreciation on the company's equipment for 2017 is computed to be $18,000.the prepaid insurance account had a $6,000 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. an analysis of the company's insurance policies showed that $1,100 of unexpired insurance coverage remains. the office supplies account had a $700 debit balance on december 31, 2016; and $3,480 of office supplies were purchased during the year. the december 31, 2017, physical count showed $300 of supplies available. two-thirds of the work related to $15,000 of cash received in advance was performed this period. the prepaid insurance account had a $6,800 debit balance at december 31, 2017, before adjusting for the costs of any expired coverage. an analysis of insurance policies showed that $5,800 of coverage had expired. wage expenses of $3,200 have been incurred but are not paid as of december 31, 2017.

Answers: 3

continue

Business, 22.06.2019 12:50, DesperatforanA

Demand increases by less than supply increases. as a result, (a) equilibrium price will decline and equilibrium quantity will rise. (b) both equilibrium price and quantity will decline. (c) both equilibrium price and quantity will rise

Answers: 3

continue

Business, 22.06.2019 12:50, montgomerykarloxc24x

You own 2,200 shares of deltona hardware. the company has stated that it plans on issuing a dividend of $0.42 a share at the end of this year and then issuing a final liquidating dividend of $2.90 a share at the end of next year. your required rate of return on this security is 16 percent. ignoring taxes, what is the value of one share of this stock to you today?

Answers: 1

continue

You know the right answer?

Birch Corp., a calendar-year corporation, was formed three years ago by its sole shareholder, James,...