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Unformatted text preview: carried back three years and carried forward five years. 14-55 a. Susan has no gain or loss and her stock basis does not increase. Code Sec. 358. b. The corporation has no income from the capital contribution. Code Sec. 118. Its basis is zero since basis carries over. Code Sec. 362. c. If Susan receives 10 percent more stock, she will have to recognize her $2,000 of realized gain since she does not meet the 80 percent control requirement. Her basis in the stock equals $2,000, her cost basis. Code Sec. 1012. 14-62 The taxable income for the year is $62,000. Capital losses are deductible only against capital gains. The $5,000 long-term capital loss is carried back three years and forward five years....
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- Summer '10