Cactus Corporation,an S Corporation,had Accumulated Earnings and Profits of $100,000

question 34

Multiple Choice

Cactus Corporation,an S Corporation,had accumulated earnings and profits of $100,000 at the beginning of 2009.Tex and Shirley each own 50% of the stock and have a basis in their stock of $50,000 on January 1,2009.Cactus does not make any distributions during 2009,but had $200,000 of ordinary income.In 2010,ordinary income was $100,000 and distributions were $100,000.What is Tex's basis at January 1,2011?

• A)$100,000
• B)$150,000
• C)$200,000
• D)$250,000

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