Question

Samantha owned 1,000 shares in Evita, Inc., an S corporation, that uses the calendar year. On October 11, Samantha sells all of her Evita stock. Her stock basis at the beginning of the tax year was $60,000. Evita's ordinary income for the year was $22,000 through the date of sale, and Samantha receives a distribution of $35,000 on May 3rd. Her stock basis at the time of the sale is:_______.a. $117,000.b. $82,000.c. $60,000.d. $47,000.

Answer 1

Answer:

Option "D" is the correct answer to the following statement.

Explanation:

Given:

Stock basis at opening = $60,000

Ordinary income for the  Taxable year = $22,000

Distribution receive = $35000

Computation of stock at the time of sales.

Stock at the time of sales = Stock basis at opening + Ordinary income for the Taxable year - Distribution receive

= $60,000 + $22,000 - $35,000

= $82,000 - $35,000

= $47,000