A, B and C Individuals Working with X Corp

A, B and C Individuals Working with X Corp

A, B and C, all individuals, own, respectively, 25%, 20% and 55% of X Corp. Their bases in their stock interests are $2,500, $200, and $4,000, respectively. X has the following items of tax significance for the current year: gross profits, $20,000; depreciation, $8,000; interest expense, $2,000; charitable contributions, $500; long-term capital gain, $5,000.

How do these results effect the individual tax returns of A, B and C?

Suppose that A had bought her interest from another individual D on January 30. How would this change your answer?

Assume the same facts as (a) except that the gross profit was only $2,000. How would this change your answer?

Same as (c) except that X owes B $500. Would this change your answer?

Refer back to the facts of 3(c). What bases do A, B and C have at yearend?

In question 3(d), what bases do A, B and C have at yearend?

Same as (f) except that in the following year X has income of $10,000. What basis does B have at the end of this following year?

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