Dudley holds a 20% ownership interest in a business for which his basis is $100,000. During the year, the entity earns profits of $90,000 and makes cash distributions of $50,000 to the owners. How do these transactions affect Dudley's basis if:

a. The entity is a C corporation?
b. The entity is a general partnership?
c. The entity is an S corporation?

Question

a. The entity is a C corporation?
b. The entity is a general partnership?
c. The entity is an S corporation?

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The Answer of Dudley holds a 20% ownership interest in a business for which his basis is $100,000. During the year, the entity earns profits of $90,000 and makes cash distributions of $50,000 to the owners. How do these transactions affect Dudley's basis if:

a. The entity is a C corporation?
b. The entity is a general partnership?
c. The entity is an S corporation?

Dudley Holds a 20% Ownership Interest in a Business for Which