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Brenda formed a public relations firm in 2011, Brenda PR, by contributing $10,000 for 100% of its common stock. Brenda PR also secured a $100,000 credit line from Chase Bank during 2012. Brenda has no profit or loss for 201. During 2012, Brenda PR earned $50,000 and $5,000 during 2013. On December 31, 2013, Brenda took distribution of $80,000.
a. What is Brenda's basis(stock and/or debt) at the end of 2013?
b. How will Brenda's basis be taxed, if at all, for 2013 as a result of the 2013 transactions?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M945291

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