Which, If Any, of the Following Items Has No Effect

question 90

Multiple Choice

Which, if any, of the following items has no effect on the stock basis of an S corporation shareholder?

• A) Net sales.
• B) Long-term capital gain.
• C) Cost of goods sold.
• D) Short-term capital loss.
• E) A mortgage taken by the S corporation.

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Definitions:

Bearer Instrument

A negotiable financial instrument that is payable to the holder or presenter.

HDC

Stands for Holder in Due Course, a term in commercial law referring to an individual who has acquired a negotiable instrument in good faith and for value, therefore, has certain protections.

Promissory Note

A written promise to pay a specified sum of money to a designated person at a specified date or on demand.

Indorses In Blank

A term referring to the endorsement of a negotiable financial instrument without specifying the endorsee, making it payable to the holder.