The beginning of last year, N, a 50% shareholder of a calendar year S corporation has a
Question:
The beginning of last year, N, a 50% shareholder of a calendar year S corporation has a stock basis of $66,000. During the year the corporation has non-separately, stated (taxable) income of $96,000. The data are obtained from supplemental sources:
dividends received $36,000
tax-exempt interest income $54,000
short-term cap gain $18,000
1245 gain $30,000
1231 gain $21,000
charitable contributions $15,000
LTCG $36,000
distributions to N $18,000
advertising expenses $39,000
beginning AAA $126,000
In calculating N’s ending stock basis, please answer the following questions:
To calculate ending stock basis, before taking into account separately stated items, add to the beginning stock basis of $66,000 taxable income of.
a. | a. $96,000
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b. | b. $48,000
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c. | c. $126,000
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d. | d. $18,000
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e. | e. None of the above |
Which of the following are not separately stated?
a. | a. Dividends
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b. | b. Tax exempt income
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c. | c. 1245 gains
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d. | d. None of the above |
Which of the following are not separately stated?
a. a. Short term capital gain
b. b. 1231 gain
c. c. Long term capital gain
d. d. None of the above
The charitable contribution
a. a. Does not affect N’s basis
b. b. Reduces N’s basis by $15,000
c. c. Reduces N’s basis by $7,500
d. d. Increases N’s basis by $15,000
e. e. Increases N’s basis by $7,500
The distribution to N
a. | a. Has no effect on N’s basis
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b. | b. Increases N’s basis by $18,000
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c. | c. Increases N’s basis by $36,000
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d. | d. Decreases N’s basis by $18,000
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e. | e. None of the above |
The following are not included in non-separately income
a. 1245 gain
b. Charitable contribution
c. Advertising expense
d. None of the above
Separately and non-separately stated items are allocated to N
a. a . At 100%
b. b. At 50% his stock ownership % on a per day basis
c. c. At whatever % the S corp agreement specially allocates
d. d. None of the above
N’s ending stock basis is:
a. a. $66,000
b. b. $189,000
c. c. $180,000
d. d. $171,000
e. e. None of the above
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen