McGraw-Hill's Taxation of Individuals and Business Entities 3rd Edition by Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver

Exercise 8

In its first year of existence, KES, an S corporation, reported a business loss of $10,000.Kim, KES's sole shareholder, reports $50,000 of taxable income from sources other than KES.What must you know to determine whether she can deduct the $10,000 loss against her other income? Explain.