Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Fair Market Value Basis $ 15,000 $ 15,000 120,000 440,000 $ 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. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests?
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Fair Market Value Basis $ 15,000 $ 15,000 120,000 440,000 $ 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. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests?
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter18: Comparative Forms Of Doing Business
Section: Chapter Questions
Problem 23P
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Transcribed Image Text:Required information
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the
following assets:
Kevan:
Cash
Land*
Totals
Tax
basis
Fair Market
Value
*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.
Basis
$ 15,000
120,000
$ 15,000
440,000
$ 135,000 $ 455,000
g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to
guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests?
Kevan
$285,000
X Answer is complete but not entirely correct.
Jerry
$ 285,000 $
Dave
285,000
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