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 Totals $120,000 $380,000 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.) b. What is Maude's tax basis in her LLC interest? Tax basis

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
Totals
$120,000 $380,000
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.)
b. What is Maude's tax basis in her LLC interest?
Tax basis
Expand
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 Totals $120,000 $380,000 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.) b. What is Maude's tax basis in her LLC interest? Tax basis

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

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.
Tagged in
Business
Accounting

Accounting For Decision Making

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Platt Company produces one product, a putter called PAR –putter. Platt uses a standard cost system a...

A: Compute the predetermined variable overhead rate: 

Q: The two independent cases are listed below:    Case A   Case B     Year 2   Year 1   Year 2   Y...

A: Cash flows from operating activities:  Cash flows from operating activities refer to the cash receiv...

Q: I am resubmitting this question as it was not fully answered and it did not have the correct answers...

A: 1. As per general accepted accounting principles, the absorption method is followed in the preparati...

Q: Identy the type(s) of gain or loss that would be recognized on the following asset sales as capital,...

A: Capital gain relates to profits on the sale of investments or real estateSec 1231 gains is computed ...

Q: Brief Exercise 21A-6 Metlock Company leased equipment from Costner Company, beginning on December 31...

A: Prepare jounal entry to record lease liability: 

Q: How do I properly journalize a accounting cycle?

A: Note: Journalizing is one of the steps of an accounting cycle. Hence, journalizing of accounting tra...

Q: The production budget for Manner Company shows units to be produced as follows: July, 620; August, 6...

A: Direct labor budget:Direct labor budget estimates the total number of direct labor hours and total d...

Q: taxation business pass thru entitiesPlease help and show calculation

A: Net investment income is the income that is earned from investment assets such as mutual funds, loan...

Q: Suppose your company sells goods for $450, of which $275 is received in cash and $175 is on account....

A: Operating activities: Operating activities refers to those activities which are performed by the com...

Q: At the end of the year, overhead applied was $42,000,000. Actual overhead was $40,300,000. Closing o...

A: Underapplied overhead:When there is a debit balance in the manufacturing overhead account during the...

Q: HH purchased new shelving for its store on April 1, 2018. The shelving is expected to have a 20-year...

A: If the management wants to report highest possible earnings in its financial statement, it can be do...

Q: 3. A recent issued demographic report indicates that there is a reasonable probability that ABC comp...

A: Under FASB ASC Section 450-20-25-2 contingency liability needs to be recorded as an expense if it is...

Q: Brief Exercise 14-9On January 1, 2017, Flounder Corporation redeemed $410,000 of bonds at 97. At the...

A: Calculate the amount of cash paid to redeem the bond.

Q: Z Inc. paid $10,320 amount paid August 1, 2017, for one-year insurance and recorded the total on as ...

A: Adjusting entries: Adjusting entries are the journal entries which are recorded at the end of the ac...

Q: Once § 1231 gains are netted against § 1231 losses, if the gains exceed the losses, the net gain is ...

A: Internal Revenue Code (IRC):  Internal Revenue Code is generally referred to as “The CODE” outlines ...

Q: Which of the following statements is correct? When depreciable property is gifted to another indivi...

A: Depreciation recapture: Depreciation recapture is a method used by ISR (Internal Revenue Service) th...

Q: I'm in the annuity section of accounting.  With the 6 tables the Spiceland book provides (listed bel...

A: FV of $1: This table is used to calculate the future value of a current investment that will grow ov...

Q: On January 1, 2017, Windsor, Inc. had these stockholders’ equity balances. Common Stock, $1 par (...

A: The Equity section is divided into several sub-parts like paid in capital, additional paid in capita...

Q: Swifty Industries is considering the purchase of new equipment costing $432,000 to replace existing ...

A: Net present values is the difference between present value of inflows of cash and present value of o...

Q: How do I solve this problem? I attempted it and got 79,100 for my final answer but I'm not sure if I...

A: Cash flow statement: Cash flow statement displays the summary of all inflows and outflows of cash in...

Q: History Bookmarks Window Help Sun 1:02 AM v2.cengagenow.com eBook Calculator Print Item Price-Earnin...

A: Dividend yield:Dividend yield ratio indicates how much percentage of share prices a company pays out...

Q: Losses have been incurred at Millard Corporation for some time. In an effort to isolate the problem ...

A: Variable costing: This is a costing method that includes variable manufacturing costs to compute the...

Q: xample #6 The company received a bill for December’s utilities on January 5. The bill was for $235. ...

A: Matching principle: As per this principle, the business entity should report an expense on its incom...

Q: Gunflint adventures operate an airplane service that take fishing parties to a remote lake season la...

A: Determine the age of the airplane in months: 

Q: Swifty’s Accounting Museum is exploring the purchase of a new building with a useful life of 20 year...

A: Calculate the total savings per year:Given:Cost of the building is $1,369,200Savings from the termin...

Q: The following operating information reports the results of Swifty Company’s production and sale of 1...

A: Operating income: Operating income is the income earned by the business from its operating activitie...

Q: Which of the following statements is false? a. one of the disadvantages of incorporation is the prob...

A: Corporation:A business concern where there is a separate legal entity, and are owned by shareholders...

Q: Easter Supply sells a variety of merchandise to retail stores on account, but it insists that any cu...

A: Click to see the answer

Q: The following information is available for Sandhill Co. for three recent fiscal years.     2017 ...

A: Inventory turnover: This is the ratio which analyzes the number of times inventory is sold during th...

Q: They are going to start a manufacturing company and need help deciding what entity type to choose to...

A: The different types of business entities prevent in an economy are(a)    Sole Proprietorship(b)    P...

Q: a. A new operating system for an existing machine is expected to cost $520,000 and have a useful lif...

A: We need to add back annual depreciation to after tac profits, so that we are able to determine the c...

Q: Engines Done Right Co. is trying to establish the standard labor cost of a typical engine tune-up. T...

A: Direct labor variances: The difference between the actual labor cost in the production and the stand...

Q: Effects of stock split and stock dividend on EPSRequired:a. For the year ended December 31, 2015, Fi...

A: Stock split means new shares are issued to the current shareholder’s in proportion of their existing...

Q: In terms of the tax formula applicable to individual taxpayers, which, if any, of the following stat...

A: Deductions for AGI means above the line deduction which a taxpayer can deduct from his gross income ...

Q: A 25-year annuity was purchased with $225,000 that had accumulated in a RRSP.  The annuity provides ...

A: DefinitionRRSP:  A Registered Retirement Saving Plan is an investment cum retirement saving plan for...

Q: Shamrock, Inc.’s income statement contained the condensed information below. Shamrock, Inc.Incom...

A: Statement of cash flows: This statement reports all the cash transactions which are responsible for ...

Q: I'm having trouble solving this problem. I don't understand it at all and even tried viewing the 'sh...

A: Cash flow from operating activities relate to the cash generated from operations i.e. normal day to ...

Q: I'm not sure how to start working this problem  Exercise 6-1 Waterway Sports sells volleyball kits ...

A: Flexible budget: A flexible budget is referred as a thorough plan for controlling the fixed and vari...

Q: Hills Company’s June 30 bank statement and the June ledger account for cash are summarized here:   ...

A: Calculate the cash balance (after reconciliation) of Hills  Company at the end of the June 30.

Q: The MRS , professional soccer team, prepares financial statements on a monthly basis. The soccer sea...

A: Adjusting Entries: Adjusting entries refers to those journal entries which are prepared at the end o...

Q: Cost Relationships The following costs are for Optical View Inc., a contact lens manufacturer:   Req...

A: Total Cost of production includes both fixed cost and variable costs. Variable costs are those which...

Q: Identify the following expenditures as capital expenditures or revenue expenditures. Installed an e...

A: Capital expenditures: These costs are incurred to extend the useful life, production capacity, and o...

Q: Calculate activity measures The following information was available for the year ended December 31, ...

A: Inventory turnover: Inventory Turnover Ratio measures the company’s ability to sell its inventory, i...

Q: Goshford Company produces a single product and has capacity to produce 100,000 units per month. Cost...

A: Net income: Net income is the residual amount left after deducting all the expenses incurred by the ...

Q: Common stock—issuance and dividend transactions Altuve Co. was incorporated on January 1, 2016, at w...

A: Dividends: This is the amount of cash distributed to stockholders by a company out its earnings, acc...

Q: If I were to have accounts receivable in the millions and were $ 74 million at the beginning of year...

A: Accounts receivable turnover: This is the ratio which analyzes the number of times accounts receivab...

Q: Brief Exercise 15-10Sweet Inc. declared a cash dividend of $2.2 per share on its 5 million outstandi...

A: Journal: Journal is the method of recording monetary business transactions in chronological order. I...

Q: The company received a bill for December’s utilities on January 5. The bill was for $235.   So at 12...

A: Adjusting entries:Adjusting entries are made at the end of each accounting period, to record the rev...

Q: Tim and Kate attend St. Peter Roman Catholic Church were they contribute $75 each Sunday by check fo...

A: Generally , one can deduct contributions made by money or property to a qualified institution. A qui...

Q: Activity Levels and Cost Drivers Shroeder Machine Shop has the following activities:   Machine oper...

A: Unit level activities means the activities required to be performed each time the product is manufac...