LO1 Louis is the president and 40% owner of Adams Company. His basis in Adams at the beginning of the year is $8,000. Adams suffers a net operating loss of $15,000 during the current year. Louis receives a $5,000 cash distribution from Adams during the year. Determine the effect of the company’s results on Louis under each of the following assumptions:
i. Adams Company is a partnership.
j. Adams Company is a corporation.
k. Adams Company is an S corporation.
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