Mira and Lemma are equal owners of a business entity. Each contributed $51,000 cash to the business. Then the entity acquired a $204,000. loan from a bank. This year operating profits totaled $61,200. Determine Lemmas basis in her interest at the end of the tax year assuming that the entity is a partnership, a C corporation, or a S corporation.

a. If the entity is a partnership, Mira and Lemma each have a basis of $fill in the blank 1 at the end of the year.

b. If the entity is a C corporation, Mira and Lemma each have a basis of $fill in the blank 2 at the end of the year.

c. If the entity is an S corporation, Mira and Lemma each have a basis of $fill in the blank 3 at the end of the year.

Carlota and Dave formed an S corporation; Carlota owns 75% of the out-standing shares, and Dave owns the rest. When the entitys AAA balance is $1,000,000, it distributes an asset to each shareholder; the basis of each asset to the corporation is $175,000. Carlotas asset is worth $245,000, and Daves is worth $210,000.

a. How much gain, if any, does the the corporation recognize as a result of the distribution? $fill in the blank 1

b. By how much, if any, does the distribution increase Daves gross income? $fill in the blank 2

c. By how much, if any, does the distribution increase Carlotas gross income? $fill in the blank 3