Refer to the facts in the preceding example. BLS generated $408,000 ordinary business income in 2015. a.

Question:

Refer to the facts in the preceding example. BLS generated $408,000 ordinary business income in 2015.
a. How much of Leo’s share of this income is included in his 2015 taxable income?
b. Compute Leo’s basis in his BLS stock and his BLS note at the end of 2015.
c. How would your answers change if BLS’s ordinary business income was only $220,000?