Income or loss from bearcave

Assignment Help Management Theories

Reference no: EM131004431

Sidney and Gertrude own 40% of Bearcave Bookstore, an S corporation. The remaining 60% is owned by their son Boris. Sidney and Gertrude do not participate in operating or managing the store, and they invested $19,000 in the business when it opened in 2007. The bookstore reported the following net income (loss) for the years 2007 through 2010:

2007	2008	2009	2010
$(24,000)	$(14,000)	$(12,000)	$5,000

How much do Sidney and Gertrude have at risk in Bearcave at the end of each year (2007-2010)?
What amount can they recognize as income or loss from Bearcave for each year (2007-2010)?
Assume that Sidney and Gertrude materially participate in Bearcave for each year (2007-2010). What amount can they recognize as income or loss from Bearcave for each year (2007-2010)?

Reference no: EM131004431

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