Equal members Stu Price and Doug Billings form Smiles, LLC, a dental practice. Price contributes assets from his existing practice.Price contributedcash basis accounts receivables of $15,000(since cash basis there is a $0tax basis for the receivables) and depreciated equipment (Equipment # 1) with a fair market value of $21,000 and adjusted basis of $3,000. The equipment has a three year remaining recovery period.

Billings is new to the profession and contributes equipment (Equipment #2) he purchased for $36,000 from a retiring practitioner.

Required 1

1. Compute the members' Tax and 704(b) "Book" basis in the LLC in their Capital Accounts and specific asset accounts after initial contribution of property to Smiles,LLC.

Member

Capital, Stu Price

Accounts Receivable

Tax Basis

$_

$_

"Book" Basis

$_

$_

Equipment #1

$_

$

Capital, Doug Billings

$

$

Equipment #2

$_

$

1. Compute the LLC's tax basis in the property contributed to Smiles,LLC.

Tax Basis

AccountsReceivable$

Equipment#1$

Equipment#2$