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,and she receives a distribution of $35,000 on May 3rd.Her stock basis at the time of the sale is:

Question

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Samantha's stock basis would increase by the $22,000 of ordinary income and decrease by the $35,000 distribution, resulting in a basis of $47,000 at the time of sale.

Samantha Owned 1,000 Shares in Evita,Inc