Laurel contributed equipment worth $175,000, purchased 8 months ago for $203,500 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 15 percent profits and capital interest in the LLC. Laurel agreed to guarantee all $18,900 of Sand Creeks accounts payable, but she did not guarantee any portion of the $87,500 nonrecourse mortgage securing Sand Creeks office building. Other than the accounts payable and mortgage, Sand Creek does not owe any debts to other creditors.

a.	What is Laurels initial tax basis in her LLC interest?

Tax basis

b.

Laurels holding period in the partnership interest begins the day the LLC interest is acquired.

	True
	False

c.

What is Sand Creeks initial basis in the contributed property?

Initial basis

d.	What is Sand Creeks holding period in the contributed property?

Holding period