On January 1 of This Year, Conrad Nelson Contributed $15,000

question 5

Multiple Choice

On January 1 of this year, Conrad Nelson contributed $15,000 cash in exchange for 50 shares of stock in Sterling Inc., an S corporation. Sterling employs Conrad as its director of marketing. Conrad's current year salary was $70,000 and his pro rata share of Sterling's ordinary business income was $16,800. During the year, Conrad received a $9,000 cash distribution with respect to his Sterling stock. Compute Conrad's basis in his Sterling stock at year end.

• A) $15,000
• B) $22,800
• C) $31,800
• D) $92,800

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RFP

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Reliability

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