Required information [The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Basis $ 160,000 290,000 100,000 Fair Market Value $ 160,000 314,000 200,000 $ 674,000 Investments Land Totals $ 550,000 Liabilities and capital: Nonrecourse liabilities $ 180,000 185,000 185,000 Totals $ 550,000 $ 674,000 Lance* Robert* $ 180,000 247,000 247,000 *Assume that Lance's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. (Leave no answer blank. Enter zero if applicable.) a. Compute and characterize any gain or loss Dave may have to recognize as a result of his admission to Cirque Capital. Answer is complete but not entirely correct. Gain or loss recognized $ 51,400 as Ordinary income