Kim contributes land (basis of $190,000; fair market value of $250,000) to a business entity in exchange for 100% of the stock. During the first year of operation, the entity earns a profit of $75,000. At the end of the first year, the entity has outstanding liabilities of $30,000 ($20,000 recourse and $10,000 nonrecourse). Select from the following:
a. If the entity is a C corporation, Kim's basis for her stock at the end of the first year is $265,000 ($190,000+ $75,000) and her at-risk basis is $265,000.
b. If the entity is a partnership, Kim's basis for her partnership interest (outside basis) at the end of the first year is $355,000 ($250,000+ $75,000+ $30,000) and her at- risk basis is $345,000 ($250,000+ $75,000 + $20,000).
c. If the entity is an Scorporation, Kim's basis for her stock at the end of the first year is $345,000 ($250,000+ $75,000 + $20,000) and her at-risk basis is $345,000.
d. Only a. and c. are correct.
e. Choice a., b., and c. are incorrect.