► Cactus Corporation, an S Corporation, had accumulated earnings and profits of $100,000 at the beginning of 2009. Tex and Shirley each own 50% of the stock and have a basis in their stock of $50,000 on January 1, 2009. Cactus does not make any distributions during 2009 but had $200,000 of ordinary income. In 2010, ordinary income was $100,000 and distributions were $100,000. What is Tex's basis at January 1, 2011? A) $100,000 B) $150,000 C) $200,000 D) $250,000
► Cactus Corporation, an S Corporation, had accumulated earnings and profits of $100,000 at the beginning of 2009. Tex and Shirley each own 50% of the stock and have a basis in their stock of $50,000 on January 1, 2009. Cactus does not make any distributions during 2009 but had $200,000 of ordinary income. In 2010, ordinary income was $100,000 and distributions were $100,000. What is Tex's basis at January 1, 2011? A) $100,000 B) $150,000 C) $200,000 D) $250,000
Chapter19: Corporations: Distributions Not In Complete Liquidation
Section: Chapter Questions
Problem 37P
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Transcribed Image Text:►
Cactus Corporation, an S Corporation, had accumulated earnings and
profits of $100,000 at the beginning of 2009. Tex and Shirley each
own 50% of the stock and have a basis in their stock of $50,000 on
January 1, 2009. Cactus does not make any distributions during 2009
but had $200,000 of ordinary income. In 2010, ordinary income was
$100,000 and distributions were $100,000. What is Tex's basis at
January 1, 2011?
A) $100,000
B) $150,000
C) $200,000
D) $250,000
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