Assume Jack and Jill, 25 and 75 percent shareholders
Assume Jack and Jill, 25 and 75 percent shareholders in UpAHill Corporation, have tax bases in
their shares at the beginning of year 1 of $24,000 and $56,000, respectively.
UpAHill Corporation (an S Corporation)
Income Statement
December 31, year 1 and year 2
Year 1
Sales revenue
$
175,000 $
Cost of goods sold
(60,000)
Salary to owners Jack and Jill
(40,000)
Employee wages
(15,000)
Depreciation expense
(10,000)
Miscellaneous expenses
(7,500)
Interest income
2,000
Dividend income
500
Overall net income
$
45,000 $ Year 2
310,000
(85,000)
(50,000)
(20,000)
(15,000)
(9,000)
2,500
1,000
134,500 1) Also assume no distributions were made. Given the income
statement above, what are their tax bases in their shares at
the end of year 1?
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Answers
Status NEW
Posted 11 Jul 2017 06:07 AM
My Price 7.00
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