2. LO.4 Mira and Lemma are equal owners of a business entity. Each contributed

$25,000 cash to the business. Then the entity acquired a $100,000 loan from a bank. This year operating profits totaled $30,000. Determine Lemma’s basis in her interest at the end of the tax year assuming that the entity is:

a. A partnership.

b. A C corporation.

c. An S corporation.