Problem
John is a 50% shareholder of an S corporation that owns rental real estate that generated a $30000 loss for the current tax year. The S corporation paid $90000 for the property it purchased. The corporation financed its purchase by John paying $1000 for his stock and lending the corporation $9000 from John's personal funds. The corporation borrowed $80000 from Bank of America which John guaranteed so the bank would lend the corporation the money. Thus the corporation collected $90000 total cash to buy the property (10K from John and 80k from the bank). The $30000 loss was financed by the other shareholder lending the corporation the money it needed to pay the business expenses. How much can John deduct in this tax year as his pass-thru of loss from this S corporation?