Deduction on individual income tax return problem


Jennie purchased 50 percent of the shares of SJ Corporation, a calendar year S corporation, for $7,000. She also guaranteed a corporate loan of $6,000. For 2011, SJ Corporation had an operating loss of $22,000. What is the amount of SJ Corporation's loss that Jennie may deduct on her individual income tax return for 2011?

a. $11,000.

b. $10,000.

c. $7,000.

d. 0.

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Accounting Basics: Deduction on individual income tax return problem
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