Question
Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $51,000 of
Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $51,000 of accounts payable and no other liabilities. The current fair market value of Winterhavens capital is $260,000.
a. If Connie receives a 5 percent capital interest only, how much income must she report and what is her tax basis in the LLC interest?
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b. If Connie receives a 5 percent profits interest only, how much income must she report and what is her tax basis in the LLC interest?
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c. If Connie receives a 5 percent capital and profits interest, how much income must she report and what is her tax basis in the LLC interest?
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Management Accounting Evolution Not Revolution
Authors: Michael Bromwich, Al Bhimani
1st Edition
0908269137, 978-0908269136
