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b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest. Tax basis Dave Tatsuki Robert

b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest. Tax basis Dave Tatsuki Robert

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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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 Basis Tatsuki $ 150,000 200,000 150,000 $ 500,000 Robert $ 100,000 200,000 200,000 $ 500,000 "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. Fair Market Value b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest. $ 150,000 700,000 250,000 $1,100,000 $ 100,000 500,000 500,000 $ 1,100,000
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 Basis Tatsuki $ 150,000 200,000 150,000 $ 500,000 Robert $ 100,000 200,000 200,000 $ 500,000 "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. Fair Market Value b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest. $ 150,000 700,000 250,000 $1,100,000 $ 100,000 500,000 500,000 $ 1,100,000
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