Ordinary income and separately stated items for the year

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Reference no: EM131866186

Dion, a shareholder of Meadow Brook Corporation, an S corporation, owned 20% of the stock for 292 days and 25% of the stock for the remaining 73 days in the year. Her stock basis at the beginning of the year was $32,000 and she purchased an additional $9,000 of stock this year. Given the amount of income and deductions listed below, compute Dion’s share of each item.

Ordinary income $80,000

Tax-exempt interest income 3,000

Salary paid to Dion (52,000)

Charitable contributions (6,000)

Dividends received 5,000

Short-term capital loss (6,000)

Refund of prior state income taxes 5,000

LTCL ( 7,000)

LTCG 14,000

a. What are Dion’s shares of ordinary income and separately stated items for the year?

b. What is Dion’s adjusted basis in her S stock at year-end?

Reference no: EM131866186

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