At the beginning of the tax year, Lizzie holds a $10,000 stock basis as the sole shareholder of Spike, Inc., an s corporation. During the year, Spike reports the following: Net taxable income from sales $25,000 Net short-term capital loss (18,000) Cash distribution to Lizzie, 12/31 40,000 If an amount is zero, enter "o". a. Determine Lizzie's stock basis at the end of the year. $ o b. Of Lizzie's $40,000 cash distribution, x is tax-free and $ 0 X is a capital gain X of the short-term capital loss is suspended this year. Feedback Check My Work The calculation of the initial tax basis of stock in an S corporation is similar to that for the basis of stock in a C corporation and depends upon the manner in which the shares are acquired (e.g., gift, inheritance, purchase, or exchange under $ 351). Once the initial tax basis is determined, various transactions during the life of the corporation affect the shareholder's basis in the stock