CPA · Question 60 · Area V: Entity Taxation

A taxpayer is a 10% shareholder in an S Corporation. The taxpayer's stock basis at the beginning of the year is $10,000. The S Corporation reports a $200,000 ordinary loss for the year. The taxpayer's share is $20,000. The taxpayer also has a $5,000 loan outstanding to the corporation. What amount of loss can the taxpayer deduct in the current year?