Stephanie Owns a 25% Interest in a Qualifying S Corporation

question 69

Multiple Choice

Stephanie owns a 25% interest in a qualifying S corporation.Stephanie's basis in the stock was $40,000 at the end of the year after adjustments are made for capital contributions and distributions (but not operating results) .Stephanie also loaned the S corporation $10,000 this year.The S corporation incurred a $240,000 ordinary loss this year.Assume that next year the S corporation's ordinary income is $160,000.Stephanie's basis in her stock at the end of next year is

• A)$10,000.
• B)$20,000.
• C)$30,000.
• D)$40,000.

---

Definitions:

Disjunctive Proposition

A logical statement that presents two or more options as possibilities, where the truth of at least one option makes the proposition true.

Syllogism Valid

A form of reasoning in which a conclusion is drawn from two given or assumed propositions (premises); valid if the conclusion logically follows from the premises.

Conclusion

The final part of something, such as an argument or a piece of writing, summarizing the main points or deducing a final decision.

Disjunctive Propositions

Statements that offer a choice between two or more mutually exclusive options or propositions.