Oscar buys a 10% interest in Britanny Corporation paying $92,000 cash on January 1,2015.During 2015,Britanny Corporation reports a loss of $30,000 and pays cash dividends to shareholders of $10,000.For 2016,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 2016 is:

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Oscar's initial basis is $92,000. In 2015, his share of the loss is 10% of $30,000, which is $3,000, and his share of the dividends is 10% of $10,000, which is $1,000. In 2016, his share of the loss is 10% of $60,000, which is $6,000, and his share of the dividends is 10% of $20,000, which is $2,000. The basis is adjusted by subtracting the share of losses and dividends: $92,000 - $3,000 - $1,000 - $6,000 - $2,000 = $80,000.

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