2 corporate tax problems regarding partnership, please see the attached file

Question 1 ABC LLC balance sheet is as follows on January 1, 2016 ASSETS Inside Basis $ 20,000 18,000 30,000 12,000 40,000 30,000 Cash Receivables Inventory Supplies Machinery Building Land FMV $ 20,000 18,000 36,000 16,000 60,000 100,000 60,000 70,000 $ 210,000 $ 320,000 Liabilities and Capital Recourse Liabilities $ 40,000 Recourse liability is mortgage on Land LLC Members' capital Anne (40%) Becca (60%) Machinery cost Building Cost $ Outside Basis 150,500 59,500 40,000 Tax bracket of member 35% 15% 54000 80000 Presume no 754 election 1) Are there any hot (751) assets, and if so, which? (show calculations) The following questions are independent of each other. 2) This year, Becca wants to receive 10000 of the inventory to use in her new personal business Anne knows a little about tax and says...ONLY if we make sure there is no immediate taxable income a. If only Becca receives any distributions, what should we distribute to Becca, and how much in addition to the inventory? Why? b. If Becca receives her inventory, what should we distribute to Anne, (which asset, how much of it, and why) 3) What happens if Anne receives a cash distribution of 40,000 reducing her interest to 30% (Her outside basis, gain/loss and character, and inside basis of assets) Question 2 YEAR 1 - 2016 Ann, Bess and Cat form the ABC LLC, contributing as follows: Ann manages the LLC and Bess and Cat don't go anywhere near it. Individual Ann (20%) Asset Cash Land (inventory) Building Land Non Recourse mortgage on Land Basis to MEMBER 15000 10000 Bess - (50%) Cat - (30%) Equipment Depreciation on equipment = FMV 15000 25000 40000 50000 60000 70000 45000 60000 30000 25000 Revenue for the year 200000 Cost of Goods Sold 150000 Labor expenses for year 80000 Rent Expense for year 10000 Dividend Income 12000 Meal & Entertainment Expenses 4000 Charitable Contribution 5000 Take out loan that all three of them must guarantee 20000 YEAR 2 -2017 Revenue for the year Cost of Goods Sold Labor expenses for year Rent Expense for year Cash Distributions for year (ignore 751): Ann Bess 300000 180000 50000 10000 12000 Her Salary from Partnership 15000 Just a distribution Cat Municipal Bond Income Charitable Contribution 5000 Just a distribution 3000 5000 Pay off part of Loan from first year 8000 Sell Ann's Land (they have been using it as a parking lot) for Distribute Bess Land (they have been using as parking lot) to Cat when it is worth What are: 1) Inside basis at end of each year 2) Outside basis for each at end of each year 3) Income/loss recognized by all during of each year 4) Income/loss suspended each year, and type and why? 30000 80000