Odell owns 30% of Aluminum Company for which the basis is $200,000. Odell sells one-fourth of the ownership interest to Bailey for $90,000. Which of the following statements is true?
a. If Aluminum is a C corporation, Odell has a recognized capital gain of $40,000.
b. If Aluminum is an S corporation, Odell has a recognized gain of $40,000, some of which may be capital and some of which may be ordinary income.
c. If Aluminum is an LLC, Odell has an ordinary income of $110,000.
d. If Aluminum is an S corporation, Odell has a gain of $110,000 and an ordinary income of $33,000 (30% of $110,000).
e. If Aluminum is a partnership, Odell has a recognized capital gain of $40,000.