individuals I ("I") and J ("J") began a business (the "business") together on January 1 of Year 1. I contributed property with a fair market value ("FMV") of $100,000 and an adjusted basis of$5,000 to the business and J contributed $100,000 cash to the business. Each was a 50% owner.

In Year 1 the business earned $4,000 income, and distributed $1,000 cash to each of I and J on October 1.

In Year 2 the business suffered a loss of$14,000 and distributed $1,000 cash to each ofl and Jon October 1.

a. What is A's initial adjusted basis (immediately after contribution) in the business if

i. It is conducted as a C Corporation

i. It is conducted as a Partnership

b. What income, gain or loss, ifany, does A recognize in Year 1 if the business is conducted

i. As a C Corporation

As a Partnership

c.What income, gain or loss, if any, does A recognize in Year 2 if the business is conducted

1. As a C Corporation

ii. As a Partnership

iii. How would the answer to c(i) and (ii) change, if at all, if the distribution in Year 2 had occurred on January 1 instead of October 1?