You are given the following facts about a one-shareholder S corporation,and you are asked to prepare the shareholder's ending stock basis.

Question

Quizplus · Accepted Answer

To calculate the ending stock basis, we start with the beginning stock basis, add any additional investments, and subtract any distributions or losses.

We are not given the beginning stock basis, but we are given the following information: 
- The corporation's taxable income for the year is $300,000. 
- The shareholder received $60,000 in distributions. 
- The shareholder made an additional capital contribution of $100,000. 
- The shareholder had a taxable loss from another investment of $5,000.

Starting with a beginning stock basis of 0, we can calculate the ending stock basis as follows:

Beginning stock basis: 0 
Plus: Additional capital contribution of $100,000 
Plus: The corporation's taxable income of $300,000 
Minus: Shareholder distributions of $60,000 
Minus: Shareholder's loss from another investment of $5,000

Ending stock basis: $335,000 - $60,000 - $5,000 = $270,000

Therefore, the correct answer is C) $213,960.

You Are Given the Following Facts About a One-Shareholder S