William and Joan form an S corporation with William owning 30 percent of the stock and Joan
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William and Joan form an S corporation with William owning 30 percent of the stock and Joan the remaining 70 percent. Joan contributed $80,000 cash and services valued at $4,000.William contributed $6,000 cash and property valued at
$30,000 that has a basis of $20,000. At the end of the year, the S corporation reports the following:
Ordinary income (excluding salary) $90,000 Tax-exempt bond interest 2,000 Capital loss 4,000 Salary to Joan 30,000 Cash distribution to Joan 25,000 3-year note on land 15,000.
What is Williams’s basis in his S corporation interest at year-end?
a. $43,400
b. $45,800
c. $47,900
d. $45,900.AppendixLO1
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Related Book For
Taxation For Decision Makers 2008
ISBN: 9780324654110
2nd Edition
Authors: Shirley Dennis-Escoffier, Karen A. Fortin
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