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Charles owns a 25 percent interest in Cal Corporation, an S corporation. The corporation has run into some difficulties recently and Charles lent it $10,000. At the beginning of the year, Charles's basis in his stock was $16,000.
a. What is Charles's basis in his stock and debt at the end of the year if the corporation reports losses of $60,000?
b. What is Charles's basis in his stock and debt at the end of the year if the corporation reports losses of $90,000?
c. What is Charles's basis in his stock and debt at the end of the year if the corporation reports losses of $120,000?
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