Laurel contributed equipment worth $225,000, purchased 6 months ago for $247,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 10 percent profits and capital interest in the LLC. Laurel agreed to guarantee all $18,700 of Sand Creek’s accounts payable, but she did not guarantee any portion of the $112,500 nonrecourse mortgage securing Sand Creek’s office building. Other than the accounts payable and mortgage, Sand Creek does not owe any debts to other creditors. c. What is Sand Creek’s initial basis in the contributed property? Initial basis
Laurel contributed equipment worth $225,000, purchased 6 months ago for $247,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 10 percent profits and capital interest in the LLC. Laurel agreed to guarantee all $18,700 of Sand Creek’s accounts payable, but she did not guarantee any portion of the $112,500 nonrecourse mortgage securing Sand Creek’s office building. Other than the accounts payable and mortgage, Sand Creek does not owe any debts to other creditors. c. What is Sand Creek’s initial basis in the contributed property? Initial basis
Chapter11: Property Dispositions
Section: Chapter Questions
Problem 27P
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Laurel contributed equipment worth $225,000, purchased 6 months ago for $247,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 10 percent profits and capital interest in the LLC. Laurel agreed to guarantee all $18,700 of Sand Creek’s accounts payable, but she did not guarantee any portion of the $112,500 nonrecourse mortgage securing Sand Creek’s office building. Other than the accounts payable and mortgage, Sand Creek does not owe any debts to other creditors.
c. What is Sand Creek’s initial basis in the contributed property?
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ISBN:
9780357109731
Author:
Hoffman
Publisher:
CENGAGE LEARNING - CONSIGNMENT