- 5 - losses described in section 1366(a), and, under section 1367(b)(2)(A), a taxpayer's basis in any indebtedness of the corporation is similarly reduced after the shareholder's basis in the stock is exhausted. Petitioner here is faced with two problems. First, he must establish his bases in his stock and in the indebtedness of the corporation to him. Second, he must establish that his bases in these items had not been reduced to zero because of losses claimed in prior years. Even if we view the record most charitably in petitioner's favor, petitioner cannot establish that he had any bases remaining in his stock or in the indebtedness of the corporation. Turning first to the debt, we start with the claim that the amount of the loans represented by the notes totaled approximately $52,000. But, it is clear that the $5,500 notes of August 15 and November 7, 1985, and the $3,000 note of January 8, 1987, were renewals of earlier notes. In addition, $1,450 of a $3,450 note of November 7, 1985, was used to repay an earlier loan from the bank. The maximum advanced to the corporation would have been $36,550 ($52,000 minus $15,450). We also know that before 1990, petitioner was repaid $36,000. Petitioner's basis in his loans to EBS, therefore, could not have been more than $550.Page: Previous 1 2 3 4 5 6 7 8 9 10 Next
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