b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his ins Tax basis Dave 64,000 Tatsuki Robert
b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his ins Tax basis Dave 64,000 Tatsuki Robert
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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[The following information applies to the questions displayed below.]
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting
services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as
compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below:
Assets:
Cash
Investments
Land
Totals
Liabilities and capital:
Nonrecourse liabilities.
Tatsuki*
Robert*
Totals
Tax basis
Dave:
64,000
Basis
$ 120,000
110,000
250,000
$ 480,000
"Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their
respective shares of nonrecourse liabilities.
Note: Leave no answer blank. Enter zero if applicable.
Tatsuki
$ 120,000
180,000
180,000
$ 480,000
b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest.
Robert
Fair Market
Value
$ 120,000
140,000
380,000
$ 640,000
$ 120,000
260,000
260,000
$ 640,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2a39ead3-bc46-40d5-97e4-8f7630fa8073%2F87da862b-f92b-4fbd-be00-6be5815828df%2Fiz8etn_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Required information
[The following information applies to the questions displayed below.]
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting
services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as
compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below:
Assets:
Cash
Investments
Land
Totals
Liabilities and capital:
Nonrecourse liabilities.
Tatsuki*
Robert*
Totals
Tax basis
Dave:
64,000
Basis
$ 120,000
110,000
250,000
$ 480,000
"Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their
respective shares of nonrecourse liabilities.
Note: Leave no answer blank. Enter zero if applicable.
Tatsuki
$ 120,000
180,000
180,000
$ 480,000
b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest.
Robert
Fair Market
Value
$ 120,000
140,000
380,000
$ 640,000
$ 120,000
260,000
260,000
$ 640,000
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