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(Solution) - Troy owns 600 of the 1 000 outstanding shares of Oiler

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Troy owns 600 of the 1,000 outstanding shares of Oiler Corporation. His adjusted basis in the Oiler stock at the beginning of the current year is $88,000. Oiler Corporation is organized as an S corporation and reports the following results for the current year:
Operating income before special items . $58,000
Charitable contributions ......... 8,000
Nondeductible expenses ........ 9,000
Cash dividends paid ......... 22,000
a. What is Troy's adjusted basis in the Oiler corporation stock at the end of the current year?
b. What is Troy's gain or loss if he sells the 600 shares for $100,000 to an unrelated person at the beginning of next year?


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This question was answered on: Jul 11, 2017

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