S_corp_allocations - Michael? (c) Assuming Antoine sold his...

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Topic: Allocation of S corporation income & stock basis adjustments KJA, Inc is an electing S corporation with 100 shares outstanding. Karl owns 50 shares (basis: $100,000), John owns 25 shares (basis: $50,000), and Antoine owns 25 shares (basis: $50,000). During 2010, KJA had ordinary income of $50,000 and recognized a LTCG of $36,500. Required : (a) What is Karl, John and Antoine’s share of ordinary income and LTCG? (b) Assume instead that Antoine sold his shares to Michael on February 28, 2010 (a non-leap year) for $65,000. How much S corporation income does Antoine and Michael, respectively recognize? How much gain does Antoine recognize on the sale of his S corporation shares to
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Unformatted text preview: Michael? (c) Assuming Antoine sold his shares to Michael, compute Karl, John, and Michaels bases in the shares as of December 31, 2010. (d) In January 2011, John loaned $30,000 to KJA. The entire amount was still outstanding as of December 31, 2011. Additionally, KJA recognized a $400,000 ordinary loss for 2011. Compute the amount of loss that each shareholder may deduct in 2011, and their ending bases for their S corporation shares (assume that all three shareholders materially participate in the activities of the corporation)....
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