Greg Brady formed Johnny Bravo, Inc. (JBI) on January 1, 20x1 by contributing $100,000 in exchange for 100% of JBI stock. JBI immediately (and properly) elected S corporation status. During 20x1, JBI earned taxable income of $20,000 and tax-exempt interest of $2,000. JBI also distributed $6,000 in cash out to Greg during 20x1. At December 31, 20x1, JBI’s only liability was a loan payable to U.S. Bank for $30,000. 

What is Greg’s basis in his JBI stock on December 31, 20x1?

Answer rating: 100% (QA)

To calculate Gregs basis in his JBI stock on December 31 20x1 we need to consider the initial contri... View the full answer