Spencer Owns 50% of the Stock of Crossbill Corporation,a Calendar

question 49

Essay

Spencer owns 50% of the stock of Crossbill Corporation,a calendar year taxpayer that has elected Subchapter S status.As of January 1,2016,Spencer's basis in the stock is $40,000.Crossbill has an operating loss of $100,000 for 2016 and taxable income of $60,000 for 2017.
a.What should Spencer report for 2016?
b.What should Spencer report for 2017?
c.What is Spencer's basis in Crossbill Corporation stock as of January 1,2017? As of January 1,2018?

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Definitions:

Chi-square Test

A statistical test used to determine if there's a significant difference between the expected frequencies and the observed frequencies in one or more categories.

Economic Concerns

Issues or problems relating to the economy, including unemployment, inflation, and economic policy.

Proportion

A fraction or percentage that represents a part of a whole or a total.

Test

An examination or evaluation conducted to determine the presence, quality, or truth of a specific characteristic, hypothesis, or condition.