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?