Question
Sweeney originally contributed $310,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the
Sweeney originally contributed $310,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC's income was $186,000 and he withdrew $124,000 cash. The LLC's liabilities are $155,000, of which Sweeney's share is $38,750. The LLC has $77,500 of hot assets, of which Sweeney's share is $19,375. Sweeney sells his LLC interest to Jana for $409,200 cash, with Jana also assuming Sweeney's share of the LLC's liabilities.
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How much is Sweeney's gain on the sale, and what is its character?
Sweeney's total gain on the sale is $ , of which $ recognized as ordinary income, with the remaining $ recognized as a long-term capital gain.
How much is Jana's adjusted basis for her LLC interest? $
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