Discussion Question $13-21($LO$.5)$

Identify the effect $("$Increases$,"$ "Decreases," or $"$No effect"$)$ of each of the following on a partner's basis for a partnership interest an shareholder's $($both C corporation and S corporation$)$ basis for stock.

Effect on Basis

Item

Shareholder in C

Shareholder in S

Partner

Corporation

Corporation

Profits

Losses

Liability increase

Liability decrease

Contribution of assets

Distribution of assets $($nonliquidating$,$

$$

$$

$$

$$

$$

$$

$$

$($ili$!$i$!$ assume classified as a dividend$)$