Claude Bergeron sold 1,000 shares of Ditta, Inc., an S corporation located in Concord, North Carolina, for $9,000. He has a stock basis of $107,000 in the shares. Assuming that Claude is single and that he is the original owner of these § 1244 stock shares, calculate the appropriate tax treatment of any gain or loss.
If he sold the stock for $201,000, could he obtain a 50% or 75% exclusion under § 1202 for one-half of the gain?
Robin, Inc., a calendar C corporation in Gainesville, Florida, elects S status for DECISION MAKING 2010. The company generated a $54,000 NOL in 2009 and an NOL of $34,000 in 2010. At all times in 2009 and 2010, the stock of the corporation is owned by the same 10 shareholders, each of whom holds 10% of the stock. Irv, one of the 10 shareholders, has a stock basis of $2,400 at the beginning of 2010.
Discuss any tax aspects for Irv.