You are given the following facts about a solely owned S corporation. What is the shareholder's ending stock basis?

Question

You are given the following facts about a solely owned S corporation. What is the shareholder's ending stock basis?  ​

Quizplus · Accepted Answer

The ending stock basis is calculated by beginning with the shareholder's initial investment in the company, adding any capital contributions made throughout the year, and subtracting any distributions or losses. In this case, the beginning basis is $100,000. There were no capital contributions or distributions reported. The ordinary loss reported on the tax return is $900, which would reduce the basis to $99,100. Therefore, the correct answer is C.

You Are Given the Following Facts About a Solely Owned