Question

The Haas Corp., a calendar year S corporation, has two equal shareholders. For the year ended December 31, year 6, Haas had net 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:

Answer 1

Answer:

each shareholder basis will increase = $30000

Explanation:

given data

net income = $60,000

shareholders = 2 equal

operations = $50,000

investment interest income = $10,000

solution

we get here Increase in shareholders basis that is equal to here Taxable income and current earnings and profits

and that is equal to  $60000

and we know here two equal shareholders so

each each shareholder basis will increase by half of total

each shareholder basis will increase = $\frac{60000}{2}$

each shareholder basis will increase = $30000