Exercise 21-21 (Algorithmic) (LO. 8) When Padgett Properties LLC was formed, Nova contributed land (value of $219,000 and basis of $54,750) and $109,500 cash, and Oscar contributed cash of $328,500. Both members received a 50% interest in LLC profits and capital. a. How is the land recorded for § 704(b) book capital account purposes? For § 704(b) book capital account purposes, Padgett records the land at $ b. What is Padgett's tax basis in the land? c. If Padgett sells the land several years later for $328,500, how much tax gain will Nova and Oscar report? Nova reports a $ gain and Oscar's gain is $
Exercise 21-21 (Algorithmic) (LO. 8) When Padgett Properties LLC was formed, Nova contributed land (value of $219,000 and basis of $54,750) and $109,500 cash, and Oscar contributed cash of $328,500. Both members received a 50% interest in LLC profits and capital. a. How is the land recorded for § 704(b) book capital account purposes? For § 704(b) book capital account purposes, Padgett records the land at $ b. What is Padgett's tax basis in the land? c. If Padgett sells the land several years later for $328,500, how much tax gain will Nova and Oscar report? Nova reports a $ gain and Oscar's gain is $
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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
Transcribed Image Text:Exercise 21-21 (Algorithmic) (LO. 8)
When Padgett Properties LLC was formed, Nova contributed land (value of $219,000 and basis of $54,750) and $109,500 cash, and Oscar
contributed cash of $328,500. Both members received a 50% interest in LLC profits and capital.
a. How is the land recorded for § 704(b) book capital account purposes?
For § 704(b) book capital account purposes, Padgett records the land at $
b. What is Padgett's tax basis in the land?
c. If Padgett sells the land several years later for $328,500, how much tax gain will Nova and Oscar report?
Nova reports a $
gain and Oscar's gain is $
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