LO.5 Megan owns 60% and Vern owns 40% of a business entity. The owners would like to use the entity to share profits (60% for Megan and 40% for Vern) and to share losses

(90% for Vern and 10% for Megan). Determine the tax consequences for 2010 if the entity has a tax loss of $100,000 and is organized as:

a. A partnership.

b. A C corporation.

c. An S corporation.