Exercise 21-25 (Algorithmic) (LO. 15) Sweeney originally contributed $266,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC's income was $159,600 and he withdrew $106,400 cash. The LLC's liabilities are $133,000, of which Sweeney's share is $33,250. The LLC has $66,500 of hot assets, of which Sweeney's share is $16,625. Sweeney sells his LLC interest to Jana for $351,120 cash, with Jana also assuming Sweeney's share of the LLC's liabilities. How much is Sweeney's gain on the sale, and what is its character? Sweeney's total gain on the sale is $ 138,320 X, of which $ 66,500 X recognized as ordinary income, with the remaining 71,820 X recognized as a long-term capital gain.
Exercise 21-25 (Algorithmic) (LO. 15) Sweeney originally contributed $266,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC's income was $159,600 and he withdrew $106,400 cash. The LLC's liabilities are $133,000, of which Sweeney's share is $33,250. The LLC has $66,500 of hot assets, of which Sweeney's share is $16,625. Sweeney sells his LLC interest to Jana for $351,120 cash, with Jana also assuming Sweeney's share of the LLC's liabilities. How much is Sweeney's gain on the sale, and what is its character? Sweeney's total gain on the sale is $ 138,320 X, of which $ 66,500 X recognized as ordinary income, with the remaining 71,820 X recognized as a long-term capital gain.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Aa.60.
Transcribed Image Text:Exercise 21-25 (Algorithmic) (LO. 15)
Sweeney originally contributed $266,000 in cash for a one-fourth interest
in the Gilbert LLC. During the several years that Sweeney was a member
of the LLC, his share of the LLC's income was $159,600 and he withdrew
$106,400 cash. The LLC's liabilities are $133,000, of which Sweeney's
share is $33,250. The LLC has $66,500 of hot assets, of which Sweeney's
share is $16,625. Sweeney sells his LLC interest to Jana for $351,120
cash, with Jana also assuming Sweeney's share of the LLC's liabilities.
How much is Sweeney's gain on the sale, and what is its character?
Sweeney's total gain on the sale is 138,320 X, of which $
66,500 X recognized as ordinary income, with the remaining
71,820 X recognized as a long-term capital gain.
How much is Jana's adjusted basis for her LLC interest?
367,745 X
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
Step by step
Solved in 3 steps with 4 images
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education