S Corporation Loss
Response to the following problem:
The Viking Corporation, a calendar year corporation, formed and immediately elected to become an S corporation as of January 2, 2012. Brendon has owned 40% of the stock since the corporation's inception, with an original investment of $27,000. In 2012 and 2013, Viking had ordinary losses of $45,000 and $30,000, respectively. During 2014, Viking reported taxable income of $60,000, all ordinary income. During 2014, Viking made cash distributions of $40,000.
a. How does Brendon report his share of the 2012 and 2013 losses?
b. How does Brendon report his share of the 2014 ordinary income and cash distributions from Viking?
c. What is Brendon's basis in his shares of Viking stock on December 31, 2014?