Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Fair Market Value Basis Kevan: Cash Land* $ 15,000 120,000 $ 15,000 Totals $ 135,000 440,000 $455,000 *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. b. What is Kevan's tax basis in his LLC interest? Tax basis
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Fair Market Value Basis Kevan: Cash Land* $ 15,000 120,000 $ 15,000 Totals $ 135,000 440,000 $455,000 *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. b. What is Kevan's tax basis in his LLC interest? Tax basis
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 1BCRQ
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Transcribed Image Text:Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan
contributed the following assets:
Fair Market
Value
Basis
Kevan:
Cash
Land*
$ 15,000
120,000
$ 15,000
Totals
$ 135,000
440,000
$455,000
*Nonrecourse liability secured by the land equals $210,000.
Each member received a one-third capital and profits interest in the LLC.
Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand.
b. What is Kevan's tax basis in his LLC interest?
Tax basis
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