As of January 1,2014,Donald,the sole shareholder of Sandpiper (a calendar year C corporation),had a basis in his stock of $50,000.During 2014,Sandpiper had an operating loss of $100,000 and distributed a $70,000 dividend to Donald.As of January 1,2014,Sandpiper had accumulated E & P of $200,000.What is Donald's basis in his Sandpiper stock as of January 1,2015?

Question

Quizplus · Accepted Answer

A shareholder's basis in the stock of a C corporation is not affected by profits (or losses)of the corporation.Likewise,as long as covered by E & P,dividend distributions have no effect on the shareholder's basis.

As of January 1,2014,Donald,the Sole Shareholder of Sandpiper (A Calendar