Rondo and his business associate, Larry, are considering forming a business entity called R&L , but they
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Question:
Rondo and his business associate, Larry, are considering forming a business entity called R&L but they are unsure about whether to form it as a C corporation, an S corporation, or an LLC taxed as a partnership for tax purposes. Rondo and Larry would each invest $ in the business. Thus, each owner would take an initial basis in his ownership interest of $ no matter which entity type is formed. Shortly after the formation of the entity, the business borrowed $ from the bank. If applicable, this debt will be shared equally between the two owners.
a After taking the loan into account, what is Rondo's tax basis in his R&L stock if R&L is formed as a C corporation? b After taking the loan into account, what is Rondo's tax basis in his R&L stock if R&L is formed as an S corporation? c After taking the loan into account, what is Rondo's tax basis in his R&L ownership interest if R&L is formed as an LLC and taxed as a partnership?
Related Book For
Taxation Of Individuals And Business Entities 2015
ISBN: 9780077862367
6th Edition
Authors: Brian Spilker, Benjamin Ayers, John Robinson, Edmund Outslay, Ronald Worsham, John Barrick, Connie Weaver
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