In 2003 boles recorded the following gross receipts

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Unformatted text preview: om operations and $10,000 from investment interest income. There were no other transactions that year. Each shareholder's basis in the stock of Haas will increase by: a. b. c. d. $50,000 $30,000 $25,000 $0 CPA-01982 Explanation Choice "b" is correct. The basis of a shareholder's stock in an S corporation is increased by any item of income and decreased by any item of loss or deduction that passes through to the shareholder. Each shareholder reports ½ of $60,000. Choice "a" is incorrect. The S corporation had $50,000 income from operations, of which ½ is reported by each shareholder. However, investment income must also be considered. 43 © 2009 DeVry/Becker Educational Development Corp. All rights reserved. Maxixishere Pdf Collection Becker CPA Review, PassMaster Questions Lecture: Regulation 3 Choice "c" is incorrect. Investment income must also be considered. Choice "d" is incorrect. The basis of a shareholder's stock in an S corporation is increased by any item of income and decreased by any item of loss or deduct...
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This note was uploaded on 06/14/2013 for the course ACCOUNTING Regulation taught by Professor Becker during the Fall '10 term at Keller Graduate School of Management.

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