Samantha Owned 1,000 Shares in Evita, Inc

question 45

Multiple Choice

Samantha owned 1,000 shares in Evita, Inc., an S corporation, that uses the calendar year. On October 11, Samantha sells all of her Evita stock. Her stock basis at the beginning of the tax year was $60,000. Evita's ordinary income for the year was $22,000 through the date of sale, and she receives a distribution of $35,000 on May 3rd. Her stock basis at the time of the sale is:

• A) $117,000.
• B) $82,000.
• C) $60,000.
• D) $47,000.

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Definitions:

Personal Liability

The legal responsibility of an individual to personally satisfy debts or liabilities incurred, including those arising from actions taken in a professional capacity.

Capital Investment

Funds invested in a business for the purposes of further growth, operational development, or acquisition of long-term assets.

Joint Venture

A business arrangement in which two or more parties agree to pool their resources for the purpose of accomplishing a specific task or business activity.

Differences

The distinct characteristics or features that set one thing apart from another.