Question
Required information
When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25
percent capital and profits interest in the LLC:
Fair
Market
Value
Basis
Maude:
Cash
Land*
$ 20,000 20,000
100,000 360,000
$120,000 $380,000
Totals
Nonrecourse debt secured by the land equals $160,000
James, Harold, and Jenny each contributed $220,000 in cash for a 25 percent profits and capital
interest. (Leave no answer blank. Enter zero if applicable.)
c. What tax basis do James, Harold, and Jenny have in their LLC interests?
James
Harold
Jenny
expand button
Transcribed Image Text:Required information When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC: Fair Market Value Basis Maude: Cash Land* $ 20,000 20,000 100,000 360,000 $120,000 $380,000 Totals Nonrecourse debt secured by the land equals $160,000 James, Harold, and Jenny each contributed $220,000 in cash for a 25 percent profits and capital interest. (Leave no answer blank. Enter zero if applicable.) c. What tax basis do James, Harold, and Jenny have in their LLC interests? James Harold Jenny
Expert Solution

Want to see the full answer?

Check out a sample Q&A here
Blurred answer
Students who’ve seen this question also like:
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
Not helpful? See similar books
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Financial Statements And Business Decisions. 1Q
marketing sidebar icon
Want to see this answer and more?
Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*
*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Taxation thru business entities

A: Step1: Calculation of the each member's initial tax basis in the LLC. We have,

Q: Required information When High Horizon LLC was formed, Maude contributed the following assets in…

A: Tax basis of Maude is difference between his basis before the debt relief and relief occurred due to…

Q: Required information When High Horizon LLC was formed, Maude contributed the following assets in…

A: When Partemreship is formed and afterwards, partners may transfer cash , other tangible or…

Q: When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25…

A: Preparation of the tax basis balance sheet for High Horizon LLC showing the tax capital accounts for…

Q: questions A-E

A: Preparation of the tax basis balance sheet for High Horizon LLC showing the tax capital accounts for…

Q: Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan…

A: Click to see the answer

Q: Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan…

A: Click to see the answer

Q: Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan…

A: Solution: Partner Particulars Basis FMV Kevan Cash 15,000 15,000   Land 120,000 140,000…

Q: Lance contributed investment property worth $690,000, purchased two years ago for $277,500 cash, to…

A: Basis: It is the term that is used in taxation for the amount of investment one makes. On the basis…

Q: Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan…

A: Answer:  Partner Particulars Basis FMV Loss Gain Kevan Cash 15,000 15,000 0 0   Land 120,000…

Q: Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan…

A: Answer: Tax basis is the partnership's inside basis in the individual assets. Albee LLC's tax basis…

Q: Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan…

A: Following is the tax basis balance sheet for all partners:

Q: Parent​ , Inc owns 95​ % % of Sub Inc . ​ Parent's basis in Sub stock is​ $ 900,000 . Eva owns 5​ %…

A: Gain is generated when the purchase cost is less than the sale cost.

Q: Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan…

A: K’s contributed through the cash $15,000 and through immovable assets (land) $120,000. Total…

Q: Required information [The following information applies to the questions displayed below.] Ray and…

A: Mortgage:- Mortgages are types of loans that are used to buy houses and other real estate. Mortgages…

Q: Brown and Zendaya enter into a partnership agreement in which Brown owns 60% of the capital and…

A: Partnership means where two or more person comes together to do some common business activity and…

Q: Brett and Illain formed a new Corporation by transferring the following assets in exchange for…

A: Brett transferred property having FMV of $1000000, in consideration he received 200 shares and…

Q: Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair…

A: As per Section 351 of the IRC,  " When shareholders transfer property to a corporation and together…

Q: Gearty and Olinto organized The Worthington Corp., which issued voting common stock with a fair…

A: When a group of persons formed a corporation and transfer their assets to corporation, it is…

Q: Mai is going to contribute the following assets to a business entity in exchange for an ownership…

A: The question contains multiple sub-parts, the 1st three sub-parts are answered here. Please post the…

Q: Seth, Pete, Cara, and Jen form SPCJ Corp. (a controlled corporation) by contributing the following…

A: Seth's gain recognized in furniture and fixtures : FMV = $ 96000 Value of shares = 30 shares * $…

Q: a transfers to Moore Corporation $10,000 cash and machinery having a $15,000 basis and a $35,000 FMV…

A: “Since you have posted a question with multiple sub-parts, we will solve first three sub-parts for…

Q: Required information [The following information applies to the questions displayed below.] Cosmo…

A: Tax basis in his partnership interest=Asset tax basis×Profit percent

Q: 58. This year, Callie and Neil formed CN LLC. Callie contributed $300,000 of cash, and Neil…

A: Yes, debt treated as a nonrecourse debt to the LLC members, because Callie (40%) and Neil’s (60%)…

Q: Craig Roberts purchased one-half of Ennis Leighton's interest in the Vale and Leighton partnership…

A: Journal entries are the building blocks of accounting, which is the act of recording the economic or…

Q: Indigo Corporation wants to transfer cash of $150,000 or property worth $150,000 to one of its…

A: The assets or the property can be sold at a higher price than the amount for which it was bought.…

Q: A Co. and Z Inc. formed AZ Company on January 1, 2021. A Co. invested machinery with a carrying…

A: NOTE : As the question contains irrelevant question, assuming the balance investment should be made…

Q: Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the…

A: General Rule under sec 351(a) : No gain or lossshall be recognized if the property is transferred to…

Q: Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the…

A: ANSWER   General Rule under sec 351(a) : No gain or lossshall be recognized if the property is…

Q: Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the…

A: ANSWER   General Rule under sec 351(a) : No gain or lossshall be recognized if the property is…

Q: A, an individual (“A”) and X Corporation (“X”) each transferred property with a fair market value…

A: The following transactions are evaluated as per the given information.

Q: A, an individual (“A”) and X Corporation (“X”) each transferred property with a fair market value…

A: The following transactions are evaluated the transactions as per the given information.

Q: Wozniacki and Wilcox form Jewel LLC, with each investor receiving a one-half interest in the capital…

A: Wozniacki’s realized and recognized gain from joining Jewel: Wozniacki recognized $50,000 as…

Q: Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the…

A: answer   General Rule under sec 351(a) : No gain or lossshall be recognized if the property is…

Q: Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the…

A: ANSWER   General Rule under sec 351(a) : No gain or lossshall be recognized if the property is…

Q: Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the…

A: ANSWER     General Rule under sec 351(a) : No gain or lossshall be recognized if the property is…

Q: Elaine, James, and Jeremy form Forest Corporation by transferring the following items to the…

A: ANSWER   General Rule under sec 351(a) : No gain or lossshall be recognized if the property is…

Q: In a qualified 351 transaction, Clara transfer the following assets to Columbia corporation in…

A: Cost Accounting: It is the process of collecting, recording, analyzing the cost, summarizing cost,…

Q: Zip and Rick form Rug Corporation with the following investments. Zip transfers machinery (basis of…

A: The correct option is - Rick has  a basis of $30,000 in the 25 shares he acquires in Rug Corporation…

Q: Princess Inc. owns 100 percent of Solo Inc.'s common stock. On 11/1/X8, Princess lent $150,000 to…

A: Consolidation entries are made in case of intercompany transactions between parent and subsidiaries.…

Q: On January 2, 20xx, Abraham, Alexander and Anthony formed a partnership by combining their separate…

A: A relationship is formed when two or more people work together as co-owners of a company. This…

Q: On March 1, 20x4, CC and FF formed a partnership with each contributing the following assets: CC FE…

A: Solution: Capital account of FF Would show balance of = Cash + machinery + building - mortgage loan…

Q: Froilan Labausa contributed land, inventory, and P280,000 cash to partnership.The land has a book…

A: Partnership: This is the form of business entity which is formed by an agreement, owned and managed…

Q: Parent Corporation purchased 80 percent of the stock of Subsidiary Corporation in one transaction…

A: The United States (US) Congress passed and enacted Section 338 in 1982 to permit taxpayers to handle…

Q: Ramon incorporated his sole proprietorship by transferring inventory, a building, and land to the…

A: Gain realized = Fair market value- adjusted tax basis  of property transferred  = 282250 - 136750…

Q: On January 2 of the current year, Fenton and Myers form the FM LLC. Their contributions to the LLC…

A: Income recognition is the recognizing of the income which is computed by estimating the fair market…

Q: -Corporation A acquires C-Corporation B in a taxable stock acquisition. In the process of completing…

A: Step 1   As per US GAAP, the costs that facilitate a transaction must be capitalized.

Q: Marie and Ethan form Roundtree Corporation with the transfer of the following. Marie performs…

A: Given that: Marie performed personal services of $184,800. Contribution of Ethan: Note receivable…

Q: Global Company, a real estate developer, is owned by five founding sharcholders. Oa December 1,…

A: Generally, Dividend is the sharing of profits by the company to its shareholders. There are…

Q: 2. Mashiho Company acquires 18% of Junkyu Company's stock for P700,000 cash and carries the…

A: Business combination refers to amalgamation, acquisition of one entity by another entity by…

Knowledge Booster
Recommended textbooks for you
  • FINANCIAL ACCOUNTING
    Accounting
    ISBN:9781259964947
    Author:Libby
    Publisher:MCG
    Accounting
    Accounting
    ISBN:9781337272094
    Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
    Publisher:Cengage Learning,
    Accounting Information Systems
    Accounting
    ISBN:9781337619202
    Author:Hall, James A.
    Publisher:Cengage Learning,
  • Horngren's Cost Accounting: A Managerial Emphasis...
    Accounting
    ISBN:9780134475585
    Author:Srikant M. Datar, Madhav V. Rajan
    Publisher:PEARSON
    Intermediate Accounting
    Accounting
    ISBN:9781259722660
    Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
    Publisher:McGraw-Hill Education
    Financial and Managerial Accounting
    Accounting
    ISBN:9781259726705
    Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
    Publisher:McGraw-Hill Education
  • FINANCIAL ACCOUNTING
    Accounting
    ISBN:9781259964947
    Author:Libby
    Publisher:MCG
    Accounting
    Accounting
    ISBN:9781337272094
    Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
    Publisher:Cengage Learning,
    Accounting Information Systems
    Accounting
    ISBN:9781337619202
    Author:Hall, James A.
    Publisher:Cengage Learning,
    Horngren's Cost Accounting: A Managerial Emphasis...
    Accounting
    ISBN:9780134475585
    Author:Srikant M. Datar, Madhav V. Rajan
    Publisher:PEARSON
    Intermediate Accounting
    Accounting
    ISBN:9781259722660
    Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
    Publisher:McGraw-Hill Education
    Financial and Managerial Accounting
    Accounting
    ISBN:9781259726705
    Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
    Publisher:McGraw-Hill Education