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R and J form an LLC, which is treated as a contributes $100 in cash in return for 50% ownership of the profits and capital

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R and J form an LLC, which is treated as a contributes $100 in cash in return for 50% ownership of the profits and capital of the LLC. J provides services to the LLC and in return receives 50% ownership of the proifts and capital of the LLC. Please explain to J what her tax consequences are upon receiving the 50% ownership interest in the LLC. partnership for income tax purposes. R 5

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