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1. 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
1. 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 Ashleys basis for her ownership interest if the business is: a. A C corporation. b. An S corporation. c. A partnership.
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