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McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
Edition 3ISBN: 9780077924522 Exercise 38
When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC:
*Nonrecourse debt secured by the land equals $160,000
James, Harold and Jenny each contributed $220,000 in cash for a 25% profits and capital interest.
a. How much gain or loss will Maude and the other members recognize
b. What is Maude's tax basis in her LLC interest
c. What tax basis do James, Harold, and Jenny have in their LLC interests
d. What is High Horizon's tax basis in its assets
e. Following the format in Exhibit 9-2, prepare a tax basis balance sheet for the High Horizon LLC showing the tax capital accounts for the members.
Exhibit 9-2
*Nonrecourse debt secured by the land equals $160,000James, Harold and Jenny each contributed $220,000 in cash for a 25% profits and capital interest.
a. How much gain or loss will Maude and the other members recognize
b. What is Maude's tax basis in her LLC interest
c. What tax basis do James, Harold, and Jenny have in their LLC interests
d. What is High Horizon's tax basis in its assets
e. Following the format in Exhibit 9-2, prepare a tax basis balance sheet for the High Horizon LLC showing the tax capital accounts for the members.
Exhibit 9-2
Explanation
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a. $0.
None of the members recogni...
McGraw-Hill's Taxation of Business Entities 3rd Edition by Connie Weaver, Brian Spilker, Edmund Outslay, John Robinson, Ronald Worsham, Benjamin Ayers, John Barrick
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