Multiple Choice
Erica and Brett decide to form their new motorcycle business as an LLC. Each will receive an equal profits (loss) interest by contributing cash, property, or both. In addition to the members' contributions, their LLC will obtain a $50,000 nonrecourse loan from First Bank at the time it is formed. Brett contributes cash of $5,000 and a building he bought as a storefront for the motorcycles. The building has a FMV of $45,000, anadjusted basis of $30,000, and is secured by a $35,000 nonrecourse mortgage that theLLC will assume. What is Brett's outside tax basis in his LLC interest?
A) $37,500.
B) $45,000.
C) $42,500.
D) $40,000.
Correct Answer:
Verified
Correct Answer:
Verified
Q1: Adjustments to a partner's outside basis are
Q9: A partner's tax basis or at-risk amount
Q70: Which of the following statements exemplifies the
Q70: The term "outside basis" refers to the
Q71: In what order are the loss limitations
Q72: Which of the following statements regarding the
Q73: Zinc, LP was formed on August 1,
Q74: Which person would generally be treated as
Q77: Ruby's tax basis in her partnership interest
Q79: Lincoln, Inc., Washington, Inc., and Adams, Inc.