Samantha Tynsdale loaned S&S Home Cleaning, Inc. $2,500. If she takes a distribution of $500 in 2024, how will that affect her basis? 1. Her stock basis will decrease by $500, but her debt basis will remain $2,500. 2. Her stock basis will not be impacted, but her debt basis will decrease by $500. 3. Her stock basis will decrease by $250 and her debt basis will decrease by $250. 4. There will be no impact to her basis if she takes a distribution of $500.
Samantha Tynsdale loaned S&S Home Cleaning, Inc. $2,500. If she takes a distribution of $500 in 2024, how will that affect her basis? 1. Her stock basis will decrease by $500, but her debt basis will remain $2,500. 2. Her stock basis will not be impacted, but her debt basis will decrease by $500. 3. Her stock basis will decrease by $250 and her debt basis will decrease by $250. 4. There will be no impact to her basis if she takes a distribution of $500.
Chapter6: Business Expenses
Section: Chapter Questions
Problem 89TPC
Related questions
Question
None
Transcribed Image Text:Samantha Tynsdale loaned S&S Home Cleaning, Inc. $2,500. If she takes a distribution of $500 in 2024, how will that
affect her basis?
1.
Her stock basis will decrease by $500, but her debt basis will remain $2,500.
2.
Her stock basis will not be impacted, but her debt basis will decrease by $500.
3.
Her stock basis will decrease by $250 and her debt basis will decrease by $250.
4.
There will be no impact to her basis if she takes a distribution of $500.
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 2 steps
Recommended textbooks for you
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT
Individual Income Taxes
Accounting
ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT