34. Individuals I (I) and J (I) 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 of I and J on 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 . It is conducted as a Partnership b. What income, gain or loss, if any, does A recognize in Year 1 if the business is conducted i. As a C Corporation i. As a Partnership c. What income, gain or loss, if any, does A recognize in Year 2 if the business is conducted i. As a C Corporation i. As a Partnership ii. 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? 34. Individuals I (I) and J (I) 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 of I and J on 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 . It is conducted as a Partnership b. What income, gain or loss, if any, does A recognize in Year 1 if the business is conducted i. As a C Corporation i. As a Partnership c. What income, gain or loss, if any, does A recognize in Year 2 if the business is conducted i. As a C Corporation i. As a Partnership ii. 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