Ashley Has a 65% Interest in a Business Entity

question 163

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:
a. A C corporation.
b. An S corporation.
c. A partnership.

---

Definitions:

Procedural Memory

A type of long-term memory involved in the learning and execution of motor skills and habits.

Declarative Memories

A type of long-term memory that involves the recall of specific facts and events that can be verbally expressed, such as names, dates, and places.

Procedural Memory

Procedural memory involves the part of the long-term memory responsible for knowing how to do things, storing information on how to perform certain tasks.

Implicit Memory

A type of memory that enables the use of objects or skills without conscious awareness of the learning process.