Question: The Haas Corp., a calendar-year S corporation, has two equal shareholders. For the year ended December 31, 2010, Haas had income of $60,000, which included

The Haas Corp., a calendar-year S corporation, has two equal shareholders. For the year ended December 31, 2010, Haas had income of $60,000, which included $50,000 from operations and $10,000 from investment interest income.

There were no other transactions that year. Each shareholder’s basis in the stock of Haas will increase by

a. $50,000

b. $30,000

c. $25,000

d. $0

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