XYZ Corporation (An S Corporation) Is Owned by Jane and Rebecca

question 37

Essay

XYZ Corporation (an S corporation) is owned by Jane and Rebecca who are each 50% shareholders. At the beginning of the year, Jane's basis in her XYZ stock was $40,000. XYZ reported the following tax information for 2016. $$\begin{array} { | l | r | } \hline \text { Description } & \text { Amount } \\\hline \text { Sales revenue } & \$ 730,000 \\\hline \text { Cost of goods sold } & ( 200,000 ) \\\hline \text { Long-term capital gain } & 8,000 \\\hline \text { Dwidend income } & 5,000 \\\hline \text { Tax exempt interest } & 3,000 \\\hline \text { Salary to owners } & ( 120,000 ) \\\hline \text { Employee wages } & ( 50,000 ) \\\hline \text { Description expenses } & ( 12,000 ) \\\hline \text { Miscellaneous expenses } & ( 10,000 ) \\\hline \text { Overall net income } & \$ 354,000 \\\hline\end{array}$$ Required:
a. What amount of ordinary business income is allocated to Jane?
b. What is the amount and character of separately stated items allocated to Jane?
c. What is Jane's basis in her XYZ corp. stock at the end of the year?

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Definitions:

Healthy Living

A lifestyle that enhances physical, mental, and emotional well-being, often involving regular exercise, a balanced diet, and stress management.

Social Well-being

The aspect of an individual's overall well-being that involves meaningful social relationships and activities, community involvement, and a sense of belonging.

Mental Well-being

A state of well-being where an individual realizes their own abilities, can cope with the normal stresses of life, can work productively, and is able to make a contribution to their community.

Physical Well-being

The aspect of health that involves the body's ability to function properly, encompassing physical fitness and overall physical health.