QUESTION 1 Rania contributed equipment worth $215,000, purchased 8 months ago for $240,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 20 percent profits and capital interest in the LLC. Rania agreed to guarantee all $14,400 of Sand Creek's accounts payable, but she did not guarantee any portion of the $107,500 nonrecourse mortgage securing Sand Creek's office building. Other than the accounts payable and mortgage, Sand Creek does not have any liabilities to other creditors. A. What 1s Rania's initial tax basis in her LLC interest? QUESTION 2 Alfonso began the year with a tax basis in his partnership interest of $49,000. His share of partnership liabilities at the beginning and end of the year consists of $7,000 of recourse liabilities and $3,000 of nonrecourse liabilities. During the year, he was allocated $67,000 of partnership ordinary business loss. Alfonso does not materially participate in this partnership, and he has $3,000 of passive income from other sources. A. How much of Alfonso's loss is limited by the passive activity loss rules? QUESTION 3 Adam and Alyssa are equal partners in the PartiPilo Partnership. The partners formed the partnership three years ago by contributing cash. Prior to any distributions, the partners have the following bases in their partnership interests: PartnerOutside Basis Adam $ 17,800 Alyssa $17,800 On December 31 of the current year, the partnership makes a pro rata operating distribution of: Partner Distribution Adam Cash 22,150 Alyssa Cash 12,750 Property $ 9,400 (FMV) ($7,200 basis to partnership) Note: Leave no answer blank. Enter zero if applicable. A. What is Alyssa's basis in property? QUESTION 4 Lonnie Davis has been a general partner in the Highland Partnership for many years and is also a sole proprietor in a separate business. To spend more time focusing on his sole proprietorship, he plans to leave Highland and will receive a liquidating distribution of $70,000 in cash and land with a fair market value of $141,000 (tax basis of $174,750). Immediately before the distribution, Lonnie's basis in his partnership interest is $373,000, which includes his $97,000 share of partnership debt. Highland Partnership does not hold any hot assets. A. What is Lonnie's basis in the land