Question
Nancy has a corporation that has revenue of $800,000 per year. She takes a salary of $200,000 per year and the corporation has total other
Nancy has a corporation that has revenue of $800,000 per year. She takes asalary of $200,000per year and the corporation has total other expenses of $500,000 per year.Corporate net income before tax is $100,000.
Nancy earns interest income of $40,000 per year on a bank savings account and she has itemized deductions of $40,000. There is no state income tax. Ignore the impact of payroll taxes, when answering the following questions. Also ignore the 20% deduction related to "qualified business income."
If Nancy operates the business as an S corporation, what it the basis of her stock at the end of 2019, assuming Nancy invested $500,000 to start the company on January 1, 2019?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started