Lavery Corporation Has Two Equal Shareholders, and Has Been an Electing

Multiple Choice

Lavery Corporation has two equal shareholders, and has been an electing S corporation since its inception. In the current year, Lavery has taxable income of $60,000. This amount includes $50,000 from operations and $10,000 from investment interest income. Because of these events, each shareholder's adjusted basis in the stock will increase by

A) $- 0 -
B) $10,000
C) $25,000
D) $30,000
E) $50,000