On December 31,2015,Erica Sumners Owns One Share of an S

question 87

Essay

On December 31,2015,Erica Sumners owns one share of an S corporation's 10 outstanding shares of stock.The basis of Erica's share is $300.During 2016,the S corporation incurs a loss of $3,650.Determine the amount of the loss allocated to Erica,and calculate her stock basis at the end of 2016.

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Definitions:

Net Operating Income

A financial metric that calculates a company's profit after subtracting operating expenses but before interest and taxes.

Line Chart

A type of chart which displays information as a series of data points called 'markers' connected by straight line segments.

Pie Chart

A circular statistical graphic divided into slices to illustrate numerical proportion.

Area Chart

A graph that plots quantitative data over time, similar to a line chart, but with the area beneath the line filled in to emphasize volume.