You are given the following facts about a 50% owner of an S corporation.Compute his ending stock basis. Increase in AAA $32,000 Increase in OAA 6,300 Payroll tax penalty 2,140 Beginning stock basis 39,800 Tax-exempt interest income 4,800 Insurance premiums paid (nondeductible) 2,700 Stock purchases 22,000

Question

You are given the following facts about a 50% owner of an S corporation.Compute his ending stock basis. Increase in AAA $32,000 Increase in OAA 6,300 Payroll tax penalty 2,140 Beginning stock basis 39,800 Tax-exempt interest income 4,800 Insurance premiums paid (nondeductible) 2,700 Stock purchases 22,000 ​

Quizplus · Accepted Answer

Ending stock basis = Beginning stock basis + Increase in AAA + Increase in OAA - Payroll tax penalty - Tax-exempt interest income - Insurance premiums paid + Stock purchases= 39,800 + 32,000 + 6,300 - 2,140 - 4,800 - 2,700 + 22,000= $80,950

You Are Given the Following Facts About a 50% Owner