Question
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Basis Fair Market Value Kevan:
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets:
| Basis | Fair Market | ||||
| Value | |||||
| Kevan: | |||||
| Cash | $ | 15,000 | $ | 15,000 | |
| Land* | 120,000 | 440,000 | |||
| Totals | $ | 135,000 | $ | 455,000 | |
*Nonrecourse debt secured by the land equals $210,000
Each member received a one-third capital and profits interest in the LLC. (Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations.)
g. If the lender holding the nonrecourse debt secured by Kevans land required Kevan to guarantee 1/3 of the debt and Jerry to guarantee the remaining 2/3 of the debt when Albee LLC was formed, what are the members tax bases in their LLC interests?
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The AICPA Audit Committee Toolkit Private Companies
Authors: AICPA
2nd Edition
1940235464, 978-1940235462
