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Problem 22-40 (LO. B) Jeff, a S2% owner of an scorporation, has a stock basis...

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Accounting

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Problem 22-40 (LO. B) Jeff, a S2% owner of an scorporation, has a stock basis of zero et the beginning of the year. Jerrs basis in a S10,000 loan made to the corporation and evidenced by a corporate note has been reduced to zero by pass-through losses. During the year, his net share of the corporate taxable income is s11,000 At the end of the year, Jeff receives a $15,000 cash distribution Whet are the tex effects of the distribution? If an amount is zero, enter "0" Section 1367(DK2)(B) Indicates that is applied to restore any reduction in loan basis. Accordingly, the loan basis is increased byL ( -ontaxable income and aC--capital gain on the Theretore, Jeff has distribution

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