The Coffee Company engages in the following transactions during the taxable year.
• Sells stock held for three years as an investment for $30,000 (adjusted basis of $20,000).
• Sells land used in the business for $65,000. The land has been used as a parking lot and originally cost $40,000.
• Receives tax-exempt interest on municipal bonds of $5,000.
• Receives dividends on IBM stock of $80,000.
Describe the effect of these transactions on the entity and its owners if the entity is organized as:
a. A partnership.
b. A C corporation.
c. An S corporation.