Samantha owned 1,000 shares in Evita, Inc. an S corporation, that uses the calendar year. On October 11, 2010, Samantha sells all of her Evita stock. Her basis at the beginning of 2010 was $60,000. Her share of the corporate income for 2010 was $22,000, and she receives a distribution of $37,000 between January 1 and October 11, 2010. What is her basis at the time of the sale?
$45,000
To determine Samantha's basis at the time of the sale, you need to consider several factors. Here's how to calculate it step by step:
1. Determine the initial basis: Samantha's initial basis at the beginning of 2010 was $60,000.
2. Add the share of corporate income: Samantha's share of the corporate income for 2010 was $22,000. So, her adjusted basis becomes $60,000 + $22,000 = $82,000.
3. Subtract the distribution received: Samantha received a distribution of $37,000 between January 1 and October 11, 2010. So, her adjusted basis becomes $82,000 - $37,000 = $45,000.
Therefore, Samantha's basis at the time of the sale is $45,000.