Liabilities affect the owner's basis differently in an S corporation than they do in a partnership.

Name: Liabilities affect the owner's basis differently in an S corporation than they do in a partnership.
Brand: Quizplus
Rating: 4.8 (31 reviews)

Question

Quizplus · Accepted Answer

In an S corporation, only money and property distributions reduce the owner's basis, whereas in a partnership, both the partner's share of liabilities and distributions can affect their basis, allowing for a potentially greater basis reduction in partnerships due to the inclusion of liabilities.

Liabilities Affect the Owner's Basis Differently in an S Corporation