Ashley Has a 65% Interest in a Business Entity

question 97

Essay

Ashley has a 65% interest in a business entity.Her basis for her ownership interest is $300,000.The net income of the business for the tax year is $100,000 and the entity liabilities have increased by $60,000.Determine the effect of the earnings and the liabilities on Ashley's basis for her ownership interest if the business is:

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Definitions:

Tort Liability

Legal obligation arising from civil wrongs or injuries that do not arise from contractual obligations, resulting in damages or compensation awarded by a court.

Patient Liability

The financial responsibility borne by a patient for a portion of healthcare expenses not covered by insurance.

Professional Negligence

A breach of the duty of care by a professional towards a client or patient, leading to loss or harm due to a failure to meet standard professional practices.

Carrying Out Duties

The process of executing or performing tasks and responsibilities that are part of a specific job or role.