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Arnold owns 35% of the stock of Yellow Corporation (a C Corporation), which earns $140,000 during 2009. He also owns a 35% interest in Pastel...

Arnold owns 35% of the stock of Yellow Corporation (a C Corporation), which earns $140,000 during 2009. He also owns a 35% interest in Pastel Partnership, which earns $140,000 in 2009. During 2009, Yellow does not pay any dividends, and Pastel does not pay any distributions. Discuss Arnold's tax consequences as a result of the above information.

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