Jacob is a shareholder in Robin Corporation, an S corporation.His share of Robin's activities for the current year is a short-term capital gain of $80,000 and an operating loss of $50,000.As a result of these transactions, Jacob should increase his basis in the Robin stock by $30,000.

Question

Quizplus · Accepted Answer

Shareholders in an S corporation increase their basis by their share of items that increase the corporation's income or decrease its loss, such as capital gains or operating losses. In this case, Jacob's basis in the Robin stock would increase by $30,000 ($80,000 - $50,000).

Jacob Is a Shareholder in Robin Corporation, an S Corporation