As of January 1, 20X4, Kirk owed all 300 shares of Cork Inc., a calendar year S

Question

As of January 1, 20X4, Kirk owed all 300 shares of Cork Inc., a calendar year S corporation. On September 1, 20X4 (243 days after January 1), Kirk sold 50 shares each to Steve and Moe and kept the remaining 200 shares for himself. For the year ended December 31, 20X4, Cork reported nonseparately computed income of $109,500 and made no distributions to its shareholders. What amount of nonseparately stated income from Cork should Kirk report on his 20X4 tax return?

$97,300

$109,500

$73,000

$36,500

Explanation / Answer

Total non separately income for Cork Inc                                              109500

This income belongs to 300 shares of the company

Now Kirk owns 200 shares of the company and hence his share of non separately income =109500/300*200=$73000

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