Oscar buys a 10% interest in Britanny Corporation paying $92,000 cash on January 1, 2013. During 2013, Britanny Corporation reports a loss of $30,000 and pays cash dividends to shareholders of $10,000. For 2014, Britanny Corporation has a loss of $60,000 and pays cash dividends of $20,000. If Britanny Company is organized as an S Corporation, Oscar's basis in the Britanny Corporation stock at the end of 2014 is:

Question

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Oscar's basis is adjusted for his share of the corporation's income, losses, and dividends. Starting with $92,000, subtract 10% of the 2013 loss ($3,000) and 10% of the 2014 loss ($6,000), and subtract 10% of the dividends for 2013 ($1,000) and 2014 ($2,000). The basis at the end of 2014 is $80,000.

Oscar Buys a 10% Interest in Britanny Corporation Paying $92,000