Question

Which of the following increases a shareholder’s S corporation stock basis?

a.         Depletion deductions in excess of the basis of property taken in computing operating income.

b.         Illegal kickbacks received.

c.         Nontaxable income received.

d.         Sales income.

e.         All of the above increase basis.

Answer 1

Answer :

Option - E, All of the above increase basis

Explanation :

The following increases a shareholder’s S corporation stock basis :

1. Ordinary Income

2. Tax exempt income

3. Separately stated income items

4. Excess Depletion

Hence, depletion deductions in excess of the basis of property taken in computing operating income, illegal kickbacks received, nontaxable income received and sales income, all are increaseing a shareholder’s S corporation stock basis.