In General, an S Corporation Shareholder Makes Increasing Adjustments to Her

question 118

True/False

In general, an S corporation shareholder makes increasing adjustments to her basis first, followed by adjustments that decrease basis.

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Definitions:

Investment Account

An account held at a financial institution that is used to buy, hold, and sell investments such as stocks, bonds, and mutual funds.

Cost Model

An accounting method that values an asset based on the amount spent to acquire it minus any depreciation.

Dividend Income

Income earned from owning shares in a company, paid out from the company's earnings to shareholders.

Common Shares

Equity securities that represent ownership in a company, entitling shareholders to vote and typically to receive dividends.