Dave LaCroix recently received a 10 percent capital and profits interest in CirqueCapital LLC in exchange for consulting services he provided. If Cirque Capital hadpaid an outsider to provide the advice, it would have deducted the payment ascompensation expense. Cirque Capital's balance sheet on the day Dave received hiscapital interest appears below:Assets:CashInvestmentsLandTotalsLiabilities and capital:Nonrecourse liabilitiesTatsuki*Robert*TotalsTax basis $DaveBasis21,000$ 180,000130,000230,000$ 540,000Answer is not complete.TatsukiRobert$ 210,000165,000165,000$ 540,000*Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their taxbasis capital accounts plus their respective shares of nonrecourse liabilities.Note: Leave no answer blank. Enter zero if applicable.Fair MarketValuee. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interestif Dave receives only a profits interest.$ 180,000157,000420,000$ 757,000$ 210,000273,500273,500$ 757,000

Under the LLC, the partners are entitled to receive the partnership interest such as the share of…

Answered: Dave LaCroix recently received a 10…

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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he Whitewater LLP is equally owned by three partners and shows the following balance sheet at the end of the current tax year. Basis FMV Cash $81,000 $81,000 Unrealized receivables 0 27,000 Land 27,000 108,000 $108,000 $216,000 Petula, capital $36,000 $72,000 Prudence, capital 36,000 72,000 Primrose, capital 36,000 72,000 $108,000 $216,000 Partner Petula is an active (i.e., "general") partner retiring from the service-oriented partnership. She receives $81,000 cash, none of which is stated to be for goodwill. a. How much of the payment is for "unstated goodwill"? b. How is the $81,000 allocated between a § 736(a) income payment and a § 736(b) property payment? The $81,000 cash payment is allocated as follows:§ 736(a) income payment: § 736(b) property payment:
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Required Information [The following Information applies to the questions displayed below.] Rania contributed equipment worth $120,000, purchased 9 months ago for $136,500 cash and used In her sole proprietorship, to Sand Creek LLC in exchange for a 35 percent profits and capital Interest In the LLC. Rania agreed to guarantee all $10,200 of Sand Creek's accounts payable, but she did not guarantee any portion of the $60,000 nonrecourse mortgage securing Sand Creek's office building. Other than the accounts payable and mortgage, Sand Creek does not have any liabilities to other creditors. a. What is Rania's Initial tax basis in her LLC Interest? Tax basis
The following information is for Swifty Real Estate: SwiftyReal EstateBalance SheetDecember 31, 2020 Cash $ 25500 Accounts Payable $ 60500 Prepaid Insurance 29700 Salaries and Wages Payable 15100 Accounts Receivable 50600 Mortgage Payable 84500 Inventory 68600 Total Liabilities 160100 Land Held for Investment 83500 Land 120600 Buildings $98100 Less Accumulated Depreciation Owner's Capital 366400 (19600) 78500 Trademark 69500 Total Liabilities and Owner’s Equity Total Assets $526500 $526500 The total dollar amount of liabilities to be classified as current liabilities is $160100. $15100. $60500. $75600.
! Required information [The following information applies to the questions displayed below.] Georgio owns a 10 percent profits and capital interest in Rain Tree LLC. For the current year, Rain Tree had the following revenues, expenses, gains, and losses: Sales revenue Gain on sale of land (§1231) Cost of goods sold Depreciation-MACRS §179 deduction* Employee wages Nondeductible fines and penalties Municipal bond interest Short-term capital gains Guaranteed payment to Sandra *Assume the §179 property placed in service limitation does not apply. a. How much ordinary business income (loss) is allocated to Georgio for the year? Description Sales revenue Ordinary Business Income $ 92,000 19,500 (48,000) (6,650) (17,100) (13,900) (4,500) 7,000 5,250 (5,700) Total Amount Allocated to Georgio
On May 1, 2022, Carlo has been in a trading business for five years as a sole proprietor. He needed additional capital to fund business expansion so he decided to invite Jamie by investing cash for a one-third interest in the new partnership, CABLES Trading. CABLES Trading would assume the liabilities of Carlo's business. Jamie accepted the invitation and both agreed to revalue assets of Carlo's business as itemized: Accounts Receivable $50,000; Merchandise Inventory $28,000; Office Equipment $22,000; and Land $279,000. Account balances in the books of Carlo were as follows: Account Titles Debit Credit Cash P135,000 Accounts Receivable 60,000 Allowance for Doubtful Accounts P 4,000 Merchandise Inventory 25,000 Office Equipment 33,000 Accumulated Depreciation 15,000 Land 260,000 Accounts Payable 194,000 Carlo, Capital 300,000 How much is the capital of CABLES Trading upon formation?
Required information Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Tax basis Fair Market Value *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. Basis $ 15,000 120,000 $ 15,000 440,000 $ 135,000 $ 455,000 g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests? Kevan $285,000 X Answer is complete but not entirely correct. Jerry $ 285,000 $ Dave 285,000
A4
am. 110.
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