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For each of the following independent statements, indicate whether the trans-action will increase (1), decrease (2),...

For each of the following independent statements, indicate whether the trans-action will increase (1), decrease (2), or have no effect (NE) on the basis of a shareholder’s stock in an S corporation. a. Expenses related to tax-exempt income. b. Short-term capital gain. c. Nonseparately computed loss. d. Section 1231 gain. e. Depletion not in excess of basis. f. Separately computed income. g. Nontaxable return-of-capital distribution by the corporation. h. Advertising expenses. i. j. Business gifts in excess of $25. Depreciation recapture income. k. Dividend income received by the S corporation. l. LIFO recapture tax paid. m. Collection of a bad debt previously deducted. n. Long-term capital loss. o. Cash distribution to shareholder out of AAA.

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