Indicate by a PRP if the characteristic applies to a sole proprietorship, an SC if it applies to an S corporation, and a PAR if it applies to a partnership, and N if it does not apply to any of the three businesses. A characteristic can apply to more than one entity; write a brief explanation if a characteristic may only apply under certain conditions.
-_____ 3. Distributions from entity are generally tax-free. (Assume the S corporation shareholder has stock basis and partner has partnership or debt basis.)

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The Answer of Indicate by a PRP if the characteristic applies to a sole proprietorship, an SC if it applies to an S corporation, and a PAR if it applies to a partnership, and N if it does not apply to any of the three businesses. A characteristic can apply to more than one entity; write a brief explanation if a characteristic may only apply under certain conditions.
-_____ 3. Distributions from entity are generally tax-free. (Assume the S corporation shareholder has stock basis and partner has partnership or debt basis.)

Indicate by a PRP If the Characteristic Applies to a Sole