when high horizon llc was formed, maude contributed
the following assets in exchange for a 25 percent capital and
profits interest in the llc:
maude. basis. fmv
cash. 21500. 21500
land. 145500. 405250
non recourse debt secured by the land equals 206000
James, harold, and Jenny each contributed $220,750 in cash for a
25% profits and capital interest.
b.what is maudes tax basis in her llc interest?
c. what tax basis do James, harold, and jenny have in their llc
interest?
Ans
Particulars | Maude | Other Partners |
Basis in Land | $145,500 | |
Cash | $21,500 | $220,750 |
Nonrecourse debt secured by land in excess of basis ($206,000 - $145,500) | $60,500 | |
Balance nonrecourse mortgage ($206,000 - $60,500)*25% | $36,375 | $36,375 |
Relief from Mortgaged Debt | -$206,000 | |
Initial tax basis in LLC | $57,875 | $257,125 |
b) Maudes tax basis in her llc interest = $57,875
c) Tax basis do James, harold, and jenny have in their llc interest = $257,125
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