Question

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?

Answer 1

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