Robert Elk Paid $100,000 for All of the Single Class

question 32

Essay

Robert Elk paid $100,000 for all of the single class of stock of Elkom Corporation,an electing S corporation,when incorporated in January,2007.Elkom's operating results and dividend distribution are as follows:
What is Elk's basis for his Elkom stock on December 31 of 2007?

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Definitions:

Ionizing Power

The ability of a chemical element or electromagnetic radiation to ionize atoms or molecules by altering their charge through the removal or addition of electrons.

Beta Particles

High-energy, high-speed electrons or positrons emitted by certain types of radioactive nuclei during radioactive decay.

Beta Emission

A type of radioactive decay where a beta particle (an electron or positron) is emitted from an atomic nucleus.

Gamma Radiation

High-energy electromagnetic radiation emitted from atomic nuclei during radioactive decay, with no mass and no charge.