Amber has a 20 ownership interest in an entity for which, Ask an Expert

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Amber has a 20% ownership interest in an entity for which she initially contributed $100,000. She is one of the original owners of the business. None of the owners are related. During the life of the business, the following have occurred:

*Cumulative losses of $200,000 during the first three years.

*Profits of $150,000 in the next year.

*Distributions to owners of $75,000 at the end of year 3.

*Distribution to Amber of $60,000 that redeems 25% of her ownership interest at the end of year 4. No other owners redeem any of their ownership interest.

Determine the tax consequences to Amber if the entity is:

a. A partnership

b. An S corporation

c. A C corporation

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9440591

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