August 2, 2022
In the 2001 shareholder A beneficial, a hundred% stockholder, generated that loan off $a hundred so you’re able to Widget Corp
Analogy. Within the season this provider got websites loss bits of $sixty. Stockholder A have zero inventory basis at the beginning of 2001. He had been able to deduct the latest $sixty loss through the elimination of his loans basis. Thus, at the beginning of 2002, shareholder A have a no stock base and you may a $40 financial obligation foundation. During 2002 Widget Corp. got $20 inside the earnings factors and you may ount cash the guy recognized of the fresh cost is $4 (($40/$100)($10)). (more…)