Agnes is going to invest $90,000 in a business entity. She will manage the business entity. Her

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Question:

Agnes is going to invest $90,000 in a business entity. She will manage the business entity. Her projected share of the loss for the first year is $36,000. Agnes’ marginal tax rate is 33%. Determine the cash flow benefit of the loss to Agnes if the business form is:

a. A general partnership.

b. An S corporation