Question
25 Hide or show questions Progress:25/50 items Calculator Xena and Xavier form the XX LLC. Xena contributes cash of $20,000, land (basis = $40,000; fair
25
Hide or show questions
Progress:25/50 items
-
Calculator
Xena and Xavier form the XX LLC. Xena contributes cash of $20,000, land (basis = $40,000; fair market value = $25,000), equipment (basis = $0; fair market value = $35,000), and inventory (basis = $30,000; fair market value = $40,000). Xavier contributed $120,000 of cash. How much is the partnership's basis in the land, equipment, and inventory, and how much is Xena's basis in the partnership interest?
a.$40,000 land, $0 equipment, $30,000 inventory; $90,000 partnership interest.
b.$25,000 land, $35,000 equipment, $30,000 inventory; $105,000 partnership interest.
c.$40,000 land, $35,000 equipment, $40,000 inventory; $135,000 partnership interest.
d.$25,000 land, $0 equipment, $30,000 inventory; $55,000 partnership interest.
PLEASE OUTLINE HOW YOU ARRIVED AT THE ANSWER SO I MAY FOLLOW ALONG IN THE FUTURE. I need to know how to do this when I take my exam. Thanks!!
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started