Emmy contributes $40,000 to a business entity in exchange for a 30% ownership interest. During the first year of operations, the entity earns a profit of $200,000, and at the end of the year, it has liabilities of $75,000.

Calculate Emmy's basis for her ownership interest if the entity is (a) a C corporation, (b) an S corporation, and (c) a partnership.

a.  If the entity is a C corporation, Emmy's ownership interest (basis) is .

b.  If the entity is an S corporation, Emmy's ownership interest (basis) is 

1. 
   c.  If the entity is a partnership, Emmy's ownership interest (basis) is.

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Generally speaking C corporations are subject to double taxation They are responsible for their own ... View the full answer