John, Ariana and Steve formed JAS LLC (a partnership). John owns 60% of JAS. Ariana and Steve each owns 20%. Their contribution to JAS is as follows: John - cash John - land Ariana Steve Assets Cash Equipment Land (FMV-3,000,000) Total Asset John Ordinary income (loss) Ariana and Steve Ordinary income (loss) John, Ariana and Steve's share of the income and loss is: 12/31/2020 12/31/2021 400,000 2,000,000 800,000 800,000 1,025,000 975,000 2,000,000 Blank # 1 4,000,000 Blank # 2 Blank # 3 -843,600 Blank # 4 Equity Capital Accounts: -281,200 Blank # 5 Blank # 6 Total Liability and Capital Blank # 7 John 2,400,000 Ariana Steve -855,000 1. What is John's tax basis in the partnership interest (outside basis) in at the end of 2022? I 2. What is Ariana's tix basis in the partnership interest (outside basis) in at the end of 2022? -285,000 3. What is Steve's tax basis in the partnership interest (outside basis) in at the end of 2022? In 2022, John, Arian and Steve are thinking about finding an outside investor to take over. The most valuable property of JAS is the prime location of the land. Which of the following strategy is better in the eyes of a potential investor? In other words, which of the followings will make a prospective investor willing to pay more for JAS? Strategy "Asset Over": In 2022, JAS transfers all if its assets to a newly-formed C-Corporation R. The FMV of the land is $3,000,000. R takes over and assumes all the tax bases from JAS's inside basis. 4. What is R's tax basis in the assets? 800,000 800,000 4,000,000 12/31/2022 5. When R sells all the assets and liquidates for $5,000,000, what is the realized gain for R? -408,000 Strategy "Interest Over" John, Ariana and Steve transfer their interest in JAS to a newly-formed C-Corporation T. The FMV of the land is $3,000,000. T "step into the shoes" of John, Ariana and Steve. T will sell all the assets and then liquidate. 6. What is T's total tax basis in the assets of JAS? -136,000 7. When T sells all the assets and liquidates for $5,000,000, what is the realized gain for T? N

John. Aisen and Steve's share of the inceme whd loss is: 1. What is John's tax basis in the perthership interest (outside basls) in at the end of 2022 ? 2. What is Ariana's If x bals in the partnershlp interest (outalde basis) in an the end of 2022 ? 3. What is stevers tax basis in the partnershls interest (outeide batis) in at the end of 20022 ? In 2022, John, Arian and Sieve are Firking about linding an oublide investor to take over. The moet valuable propenty of 3AS is the prime localon of the land. Which of the following strategr is betier in the lio par more lor JAS? Strategy "Aseet Over"; h. 2022 . JAS varniert al if at astets to a newly Alormed C. Copporation R. The FUV of the land it $3,000,000. R takes over and astumes all the tex bases trom JAS 5 inalde banis 4. What is R's tax basis in the assets? 5. When R sells all the asets and liquidates for $5,000,000, whet is the reallated gain for A7 Strategy "Interest Orer" ilquidese. 6. What is Te total tax basis in the anets of JAST? 7. When T wells ell the assets and liquidates for $5,000,050, what is Be realized gain for T ? Blank 1 Blanic a 2 Blank * 3 Blank * 4 Blank n is Blank a 6 4 A. A) (c) A. pene 20r. Their contribution to ikS it at fellows: John, Arians and Sieve's shere of the income and loas is: to pey more kor dAS? Strategy "Asset Over": 4. What is Rrs tax basis in the naste