Prepare a tax memo for the files


Problem:

A calendar year S Corporation reports an ordinary loss of $80,000 and a capital loss of $20,000. Mei Freiberg owns 30% of the entity's stock and holds a $24,000 basis in her stock. Determine the amounts of the ordinary loss and capital loss, if any, that flow through to Freiberg. Prepare a tax memo for the files, explaining your computations.

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Taxation: Prepare a tax memo for the files
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