b. If Connie receives a 5 percent profits interest only, how much income must she report, and what is her tax basis in the LLC interest? c. If Connie receives a 5 percent capital and profits interest, how much income must she report, and what is her tax basis in the LLC interest?
b. If Connie receives a 5 percent profits interest only, how much income must she report, and what is her tax basis in the LLC interest? c. If Connie receives a 5 percent capital and profits interest, how much income must she report, and what is her tax basis in the LLC interest?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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b. If Connie receives a 5 percent profits interest only, how much income must she report, and what is her tax basis in the LLC interest?
c. If Connie receives a 5 percent capital and profits interest, how much income must she report, and what is her tax basis in the LLC interest?
![### Required Information
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Connie recently provided legal services to Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $35,000 of accounts payable and no other liabilities. The current fair market value of Winterhaven's capital is $300,000.
**Note:** Leave no answer blank. Enter zero if applicable.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9976f245-0987-4f53-92e6-265364542515%2Fbb1093be-04a3-4584-b4dc-0cfb934c9299%2F7vonbjs_processed.png&w=3840&q=75)
Transcribed Image Text:### Required Information
[The following information applies to the questions displayed below.]
Connie recently provided legal services to Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $35,000 of accounts payable and no other liabilities. The current fair market value of Winterhaven's capital is $300,000.
**Note:** Leave no answer blank. Enter zero if applicable.
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Requirement:-b
Calculation of her tax basis in the LLC interest if Connie receives a 5 percent profits interest only, how much income must she report as follows:-
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