Sammy Buys a 20% Interest in Duvall Corporation Paying $100,000

question 4

Multiple Choice

Sammy buys a 20% interest in Duvall Corporation paying $100,000 cash on January 1,2016.During 2016,Duvall Corporation reports a loss of $60,000 and pays cash dividends to shareholders of $5,000.For 2017,Duvall Corporation has income of $200,000 and pays cash dividends of $40,000.If Duvall Company is organized as an S Corporation,Sammy's basis in the Duvall Corporation stock at the end of 2017 is:
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• A)$88,000
• B)$89,000
• C)$100,000
• D)$119,000
• E)$128,000

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