Which of the Following Is Not an Adjustment to an S

question 132

Multiple Choice

Which of the following is not an adjustment to an S corporation shareholder's stock basis?

• A)Increase for any contributions to the S corporation during the year.
• B)Increase for shareholder's share of ordinary business income.
• C)Decrease for shareholder's share of nondeductible items.
• D)Increase for distributions during the year.
• E)None of the choices are correct.

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Definitions:

Dividend Payment

A portion of a company's profits distributed to shareholders, typically on a quarterly basis.

Flotation Costs

The financial outlay a firm encounters when releasing new securities, involving charges for legal matters, underwriting, and registering the issuance.

Issuance

The act of making something available or distributing it officially, commonly used in the context of financial securities being issued to the public.