Summit Corp., an S Corporation, had accumulated earnings and profits of $150,000 at the beginning of 2010. John and Rebecca each own 50% of the stock, and each has a basis in their stock of $60,000 on January 1, 2010. Summit does not make any distributions during 2010 but had $250,000 of ordinary income. In 2011, ordinary income was $120,000 and distributions were $80,000. What is John's basis at January 1, 2012?
Summit Corp., an S Corporation, had accumulated earnings and profits of $150,000 at the beginning of 2010. John and Rebecca each own 50% of the stock, and each has a basis in their stock of $60,000 on January 1, 2010. Summit does not make any distributions during 2010 but had $250,000 of ordinary income. In 2011, ordinary income was $120,000 and distributions were $80,000. What is John's basis at January 1, 2012?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 31P
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Transcribed Image Text:Summit Corp., an S Corporation, had accumulated earnings and profits of $150,000
at the beginning of 2010. John and Rebecca each own 50% of the stock, and each
has a basis in their stock of $60,000 on January 1, 2010. Summit does not make any
distributions during 2010 but had $250,000 of ordinary income. In 2011, ordinary
income was $120,000 and distributions were $80,000.
What is John's basis at January 1, 2012?
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