Bryan Corporation,an S Corporation Since Its Organization,is Owned Entirely by Mr.Bryan.The

question 8

Multiple Choice

Bryan Corporation,an S corporation since its organization,is owned entirely by Mr.Bryan.The corporation uses a calendar year as its taxable year.Mr.Bryan paid $120,000 for his Bryan stock when the corporation was formed on January 1 of this year.For this year,Bryan Corporation reported the following results: $$\begin{array} { | l | r | } \hline \text { Ordinary Income } & \$ 65,000 \\\hline \text { Dividend Income } & 20,000 \\\hline \text { Short-term capital loss } & ( 2,000 ) \\\hline\end{array}$$ Distributions of $40,000 were made during the year.What is the basis of Mr.Bryan's stock on December 31?

• A)$163,000
• B)$165,000
• C)$203,000
• D)$205,000

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Definitions:

Purely Competitive

A market structure characterized by many buyers and sellers, with all firms selling identical products and no single buyer or seller able to influence the market price.

Imperfectly Competitive

Referring to market structures that do not meet the conditions of a perfect competition, often characterized by a small number of sellers, product differentiation, or barriers to entry.

MP

Member of Parliament; an elected official to the national legislative body in many countries.

Haircuts

A reduction applied to the value of assets for purposes of calculating capital requirements, risk, or losses.