Rondo and his business associate, Larry, are considering forming a business entity called R&L but they...

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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. Rondo and Larry would each invest $220,000 in the business. Thus, each owner would take an initial basis in his ownership interest of $220,000 no matter which entity type is formed. Shortly after the formation of the entity, the business borrowed $64,000 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? Rondo's tax basis 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? Rondo's tax basis 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? Rondo's tax basis 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. Rondo and Larry would each invest $220,000 in the business. Thus, each owner would take an initial basis in his ownership interest of $220,000 no matter which entity type is formed. Shortly after the formation of the entity, the business borrowed $64,000 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? Rondo's tax basis 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? Rondo's tax basis 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? Rondo's tax basis

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Answers a If RL is formed as a C Corporation Rondos tax basis will be 220000 This is because ... View the full answer