J and H each have always owned 50 percent of the stock of a calendar-year S corporation that was previously operated as a C corporation.Accounts at the beginning of the current year are shown below: $\begin{array} { l }&\text { Corporate Accounts }&\text { Stock Basis }\
A A A P T I&A E \& P&OAA&J&H\10,000&\$8,000&\$1,200&0&\$15,000&\$10,000
\end{array}$
During the year, operations show tax-exempt interest income of $5,000, net ordinary income of $20,000, and cash distributions of $40,000.What are J and H's stock basis at the end of the year?

Question

J and H each have always owned 50 percent of the stock of a calendar-year S corporation that was previously operated as a C corporation.Accounts at the beginning of the current year are shown below: $\begin{array} { l  }&\text { Corporate Accounts }&\text { Stock Basis }\
A A A P T I&A E \& P&OAA&J&H\10,000&\$8,000&\$1,200&0&\$15,000&\$10,000
\end{array}$
 During the year, operations show tax-exempt interest income of $5,000, net ordinary income of $20,000, and cash distributions of $40,000.What are J and H's stock basis at the end of the year?

Quizplus · Accepted Answer

The Answer of J and H each have always owned 50 percent of the stock of a calendar-year S corporation that was previously operated as a C corporation.Accounts at the beginning of the current year are shown below: $\begin{array} { l  }&\text { Corporate Accounts }&\text { Stock Basis }\
A A A P T I&A E \& P&OAA&J&H\10,000&\$8,000&\$1,200&0&\$15,000&\$10,000
\end{array}$
 During the year, operations show tax-exempt interest income of $5,000, net ordinary income of $20,000, and cash distributions of $40,000.What are J and H's stock basis at the end of the year?

J and H Each Have Always Owned 50 Percent of the Stock