Suppose That at the Beginning of 2020 Jamaal's Basis in His

question 16

Multiple Choice

Suppose that at the beginning of 2020 Jamaal's basis in his S corporation stock is $1,800 and he has a $10,800 debt basis associated with a $10,800 loan he made to the S corporation. In 2020, Jamaal's share of S corporation income is $4,800, and he received a $7,800 distribution from the S corporation. What is Jamaal's stock and debt basis after these transactions?

• A)$0 stock basis; $9,600 debt basis
• B)$0 stock basis; $10,800 debt basis
• C)$6,600 stock basis; $10,800 debt basis
• D)$6,600 stock basis; $3,000 debt basis
• E)None of the choices are correct.

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Definitions:

Categorical Data

Data that can be divided into groups or categories that are not numerically ordered.

Relative Data

Data that is compared to a certain reference point or to other data in order to assess its value or importance in relative terms.

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Data that aggregates or accumulates over time, adding up as new data comes in to represent a total or sum.

Cumulative Percent

A statistical calculation that shows the percentage total of observations that fall below or at a specific value when data is arranged in ascending order.