Question

You are given the following facts about a 40% owner of an S corporation. Calculate her ending stock basis.

Owner's beginning stock basis	$36,800
Increase in AAA	32,000
Increase in OAA	6,300
Payroll tax penalty	2,140
Tax-exempt interest income	4,800
Life insurance premiums paid (nondeductible)	2,700
Owner's purchases of additional stock	22,000

Answer 1

Answer
Calculation of her ending stock basis.
Particulars	Amount $
Beginning stock basis	$           36,800
Add: Increase in AAA (0.40*$32,000)	$           12,800
Add: Increase in OAA (0.40*$6,300)	$             2,520
Add: Stock purchases	$           22,000
Total (ending stock basis)	$           74,120

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