Part 1
In your own words, discuss the concept of basis, differentiating between outside basis and inside basis. Then explain how two partners, each with a 50% interest in a partnership, can have different amounts of outside basis at the formation of the partnership. Shouldn’t the two partners contribute the same amount to have the same interest? 300 words
Part 2
In your own words, describe the circumstances in which a C corporation can use the accrual basis of accounting, or the cash basis of accounting, for tax reporting purposes, and the advantages and disadvantages of using either method.
