Question
R and J form RJ, LLC, which is treated as a partnership for federal income tax purposes. R and J agree to share profits and
R and J form RJ, LLC, which is treated as a partnership for federal income tax purposes. R and J agree to share profits and losses equally. Upon formation of the LLC, R transfers cash of $10,000. J transfers property with a tax basis of $6,000 and a fair market value of $14,000. The property is encumbered with a $4,000 nonrecourse liability, which the LLC assumes.
- What is Js outside basis immediately after the formation of the LLC?
- What is Js capital account immediately after the formation of the LLC?
- What is Rs outside basis immediately after the formation of the LLC?
- What is Rs capital account immediately after the formation of the LLC?
- What is the LLCs inside basis in the property contributed by J?
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Managerial Accounting
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
13th Edition
978-0073379616, 73379611, 978-0697789938
