acct 387 ch13 q 101112

Required information [The following information applies to the questions displayed below) Rondo and his business associate, Larry, are considering forming a business entity called R\&L, but they are unsure about whether to form it as a C corporation, an S corporation, or an LLC taxed as a partnership for tax purposes. Rondo and Larry would each invest $170000 in the business. Thus, each owner would take an initial basis in his ownership interest of $170,000 no matter which entity type is formed. Shortly after the formotion of the entily, the business borrowed $54,000 from the bank. If applicable, this debt will be shared equally between the two owners. a. After taking the loan into account, what is Rondo's tax basis in his R\&L stock if R\&L is formed as a C corporation? Required information [The following information applies to the questions disployed below] Rondo and his busines5 associate, Larry, are considering forming a business entity called R\&L, but they are unsure about whether to form it as a C corporation, an S corporation, or an L.C taxed as a partnership for tax purposes. Rondo and Larry would each invest $170,000 in the business. Thus, each owner would take an initial basis in his ownership interest of $170,000 no matter which entity type is formed. Shortly after the formation of the entity, the business borrowed $54,000 from the bank. If applicable, this debt will be shared equally between the two owners. b. After taking the loan into account, what is Rondo's tax basis in his R\&L stock if R\&L is formed as an S corporation? Required information The following information applies to the questions displayed below] Rondo and his business associate, Larry, are considering forming a business entity called RAL, but they are unsure about Whether to form it as a C corporation, on 5 corporation, or an LLC toxed as a parthership for tax purposes Rondo and tarcy $170,000 no matter which entily type is formed. Shartly atter the formation of the entity, the business borrowed $54,000 from the bank. If applicable, this debt walt be shored equally between the two owiers. c. After taking the foan into account, what is Rondo's tax basis in his RSL ownership interest if RBL is formed as an LLC and taxed as a partnership