Cathy is a 40% shareholder of City Corporation. City is a calendar year S corporation. Cathy acquired
Question:
Cathy is a 40% shareholder of City Corporation. City is a calendar year S corporation. Cathy acquired her stock on January 1 of the current year for $80,000. In the current year, City reports the following results of operations, cash distributions, and salary payments:
Ordinary income allocable to Cathy......................................$30,000
Salary payments to Cathy.........................................................40,000
Long-term capital loss allocable to Cathy.................................5,000
Cash distributions to Cathy......................................................17,000
a. What is Cathy’s stock basis at the end of the current year?
b. What amounts should Cathy include in her individual tax return for the current year?
Federal Taxation 2016 Comprehensive
ISBN: 9780134104379
29th edition
Authors: Thomas R. Pope, Timothy J. Rupert, Kenneth E. Anderson