Missy corp terminates its S corporation status on August 1st 2014. Clara, the 10
ID: 2619988 • Letter: M
Question
Missy corp terminates its S corporation status on August 1st 2014. Clara, the 100% shareholder has a suspended loss of $200,000, which she cannot use due to lack of basis . Clara has one year to establish basis to allow the suspended loss to pass through to her . How can she establish basis.
A) If she buys $100,000 of additional stock
B) If she contributes $100,000 in the form of wages for services rendered
C) If she personally loans $100,000 to Missy corp.
D) If the S corporation borrows $100,000
Explanation / Answer
for the above question answer is
B) If she contributes $100,000 in the form of wages for services rendered
because clara has one year basis to allow the suspended loss to pass