Question
Don, a shareholder of Meadow Brook Corporation, an S corporation, owned 20% of the stock for 292 days and 25% of the stock for the
Don, a shareholder of Meadow Brook Corporation, an S corporation, owned 20% of the stock for 292 days and 25% of the stock for the remaining 73 days in the year. Her stock basis at the beginning of the year was $32,000 and she purchased an additional $9,000 of stock this year. Given the amount of income and deductions listed below, compute Dons share of each item. Ordinary income: $80,000 Tax-exempt interest income: 3,000 Salary paid to Dion: -52,000 Charitable contributions: -6,000 Dividends received: 5,000 Short-term capital loss: -6,000 Refund of prior state income taxes: 5,000 LTCL: -7,000 LTCG: 14,000 What are Dons shares of ordinary income and separately stated items for the year? What is Dons adjusted basis in her S stock at year-end?
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