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 as an LLC. Rondo and Larry would each invest $53,250 in the business. Thus, each owner would take an initial basis in his ownership interest of $53,250 no matter which entity type was formed. Shortly after the formation of the entity, the business borrowed $46,000 from the bank. If applicable, this debt is 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?

Rondo's tax basis:

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?

Rondo's tax basis:

c. After taking the loan into account, what is Rondo's tax basis in his R&L ownership interest if R&L is formed as an LLC?

Rondo's tax basis: