You Are Given the Following Facts About a 50% Owner

question 7

Multiple Choice

You are given the following facts about a 50% owner of an S corporation. Compute her ending stock basis. $$\begin{array} { l r } \text { Increase in AAA } & \$ 32,000 \\\text { Increase in OAA } & 6,300 \\\text { Payroll tax penalty } & 2,140 \\\text { Owner's beginning stock basis } & 39,800 \\\text { Tax-exempt interest income } & 4,800 \\\text { Insurance premiums paid (nondeductible) } & 2,700 \\\text { Owner's additional stock purchases } & 22,000 \\\text { Owner's 20\% QBI deduction } & 21,000\end{array}$$

• A) $80,950.
• B) $85,750.
• C) $100,100.
• D) $106,225.

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Definitions:

Natural Resources

Materials or substances that occur in nature and can be used for economic gain, such as minerals, forests, water, and fertile land.

Opportunity Cost

Missing potential improvements from other opportunities when a particular alternative is chosen.

Car Payments

Regular payments made towards the financing of a vehicle purchase, usually on a monthly basis.

Car Payments

Monthly payments made towards the loan taken out to purchase a vehicle.