Samantha owned 1,000 shares in Evita, Inc., an S corporation, that uses the calendar year. On October 11, 2012, Samantha sells all of her Evita stock. Her basis at the beginning of 2012 was $60,000. Her share of the corporate income for 2012 was $22,000, and she receives a distribution of $35,000 between January 1 and October 11, 2012. Her stock basis at the time of the sale is:

Question

Quizplus · Accepted Answer

To calculate Samantha's stock basis at the time of sale, we start with her beginning basis and adjust it for any income or losses that she received during the year, as well as any distributions she received.

Beginning basis: $60,000
Add share of corporate income: $22,000
Add distributions: $35,000
Adjusted basis: $117,000

Therefore, the correct answer is choice D ($47,000).

Samantha Owned 1,000 Shares in Evita, Inc