Clampett, Inc. has been an S corporation since its inception. On July 15, 2018, Clampett, Inc. distributed $50,000 to J. D. His basis in his Clampett, Inc. stock on January 1, 2018, was $45,000. For 2018, J. D. was allocated $10,000 of ordinary income from Clampett, Inc. and no separately stated items. What is J.D.'s basis in his Clampett, Inc. stock after all transactions in 2018?

Question

Quizplus · Accepted Answer

J.D.'s basis increases by the $10,000 of ordinary income, making it $55,000. The $50,000 distribution reduces the basis to $5,000.