You Are Given the Following Facts About a 40% Owner

question 86

Multiple Choice

You are given the following facts about a 40% owner of an S corporation. Calculate her ending stock basis. $\begin{array}{lr}\text { Owner's beginning stock basis } & \$ 36,800 \\\text { Increase in AAA. } & 32,000 \\\text { Increase in OAA } & 6,300 \\\text { Payroll tax penalty } & 2,140 \\\text { Tax-exempt interest income } & 4,800 \\\text { Life insurance premiums paid } & 2,700\\\text { (nondeductible) }\\\end{array}$

• A) $71,600
• B) $74,120
• C) $76,220
• D) $78,920

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Definitions:

Thrust Faulting

A type of faulting caused by compressional forces where older layers of rock are pushed up and over younger layers.

Composite Volcanoes

Mountains formed from lava flows and pyroclastic eruptions, typically featuring steep profiles and periodic explosive eruptions.

Normal Faulting

A type of fault where the hanging wall moves downward relative to the footwall, typically occurring in regions undergoing extension.

Scoria

A dark-colored volcanic rock with abundant gas bubbles, typically found around basaltic volcanoes.