Eloise contributes $40,000 to MeldCo in exchange for a 30% ownership interest. During the first year of

Question:

Eloise contributes $40,000 to MeldCo in exchange for a 30% ownership interest. During the first year of operations, MeldCo earns a profit of $200,000. At the end of that year, MeldCo holds liabilities of $75,000.
a. Calculate Eloise’s basis for her stock if MeldCo is a C corporation.
b. Calculate Eloise’s basis for her stock if MeldCo is an S corporation.
c. Calculate Eloise’s basis for her interest if MeldCo is a Partnership
A legal form of business operation between two or more individuals who share management and profits. A Written agreement between two or more individuals who join as partners to form and carry on a for-profit business. Among other things, it states...