Question
Laurel contributed equipment worth $190,000, purchased 10 months ago for $225,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for
Laurel contributed equipment worth $190,000, purchased 10 months ago for $225,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 30 percent profits and capital interest in the LLC. Laurel agreed to guarantee all $16,800 of Sand Creeks accounts payable, but she did not guarantee any portion of the $95,000 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?
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