Tax-exempt interest income

Reference no: EM13122602

Ellie and Linda are equal owners in Otter Enterprises, a calendar year business. During the year, Otter Enterprises has $400,000 of gross income and $250,000 of operating expenses. In addition, Otter has tax-exempt interest income of $250,000 and makes distributions to Ellie and Linda of $50,000 each. Discuss the impact of this information on the taxable income of Otter, Ellie, and Linda if Otter is:

a. A Partnership

b. An S corporation

c. A C corporation

Reference no: EM13122602

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