In each of the following problems, identify the tax issue(s) posed by the facts presented. Determine the possible tax consequences of each issue that you identify.

A. LMC, Inc., is equally owned by Larry, Maurice, and Charles. The owners are sports agents. LMCs income consists solely of fees from the owners clients. During the current year, LMCs net income from operations is $380,000, and it receives $20,000 in interest income. The corporation owns an interest in a limited partnership that generates a $24,000 loss in the current year.

B. Assume the same facts as in problem 63, except that LMC, Inc., is an electing S corporation.

C. Kummell Corporation reports a $200,000 taxable income in the current year. Included in the taxable income calculation are $20,000 in dividends received from less-than-20%-owned corporations, and $30,000 in charitable contributions.

D. Milena owns a 25% interest in Davis Company, an S corporation. Her basis in the Davis stock is $40,000. Davis reports an operating loss of $200,000 in the current year. Davis owes Milena $25,000 on a loan she made to the company several years ago.

E. Charlene owns a 70% interest in Maupin Mopeds, which is organized as a partnership. She wants to open another business and needs office space for it. She has Maupin distribute a building worth $150,000 to her in lieu of her normal cash distribution. Maupins basis in the building is $55,000. Charlenes basis in Maupin is $80,000.