Question

Paige, a 25% shareholder in an s corporation, had a stock basis of $10,000 at the beginning of the year. the corporation had ordinary income of $200,000 for the year. there were no separately stated items. paige received wages from the corporation of $25,000 and a distribution of $30,000. what was paige's basis in the stock at year end?

Answer 1

Paige's basis in the stock at year-end is $155,000.

Step-by-step explanation:

To determine Paige's basis in the stock at year-end, we need to consider the impact of the corporation's income, wages, and distribution on her stock basis.

First, we start with her beginning stock basis of $10,000. Then, we add the corporation's ordinary income of $200,000.

Next, we subtract the wages Paige received from the corporation, which is $25,000. Finally, we subtract the distribution of $30,000.

Therefore, Paige's basis in the stock at year-end would be: $10,000 + $200,000 - $25,000 - $30,000 = $155,000.

Answer 2

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