13. LO.4 Amy, Becky, and Chau form a business entity with each contributing the following.

Adjusted Basis Fair Market Value Amy: Cash $100,000 $100,000 Becky: Land 60,000 120,000 Chau: Services 50,000 Their ownership percentages will be as follows.

Amy 40%

Becky 40%

Chau 20%

Becky’s land has a $20,000 mortgage that is assumed by the entity. Chau is an attorney who receives her ownership interest in exchange for legal services performed to organize the entity. Determine the recognized gain to the owners, the basis for their ownership interests, and the entity’s basis for its assets if the entity is organized as:

a. A partnership.

b. A C corporation.

c. An S corporation.