Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the fo
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the fo
Chapter18: Corporations: Organization And Capital Structure
Section: Chapter Questions
Problem 2BCRQ
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Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets:
| Basis | Fair Market Value | |
|---|---|---|
| Kevan: | ||
| Cash | $ 15,000 | $ 15,000 |
| Land* | 120,000 | 440,000 |
| Totals | $ 135,000 | $ 455,000 |
*Nonrecourse liability secured by the land equals $210,000.
Each member received a one-third capital and profits interest in the LLC.
What tax basis do Jerry and Dave have in their LLC interests?
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