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Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $217,400. The fair market value of the interest is $239,140. Dulera then distributes to Franco $43,480 cash and equipment with an adjusted basis of $108,700 and a fair market value of $163,050. a. Compute Franco's basis in Dulera after the distribution. b. Compute Franco's basis in the equipment he received from Dulera.

Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $217,400. The fair market value of the interest is $239,140. Dulera then distributes to Franco $43,480 cash and equipment with an adjusted basis of $108,700 and a fair market value of $163,050. a. Compute Franco's basis in Dulera after the distribution. b. Compute Franco's basis in the equipment he received from Dulera.

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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Exercise 14-6 (Algorithmic) (LO. 4, 5) Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $217,400. The fair market value of the interest is $239,140. Dulera then distributes to Franco $43,480 cash and equipment with an adjusted basis of $108,700 and a fair market value of $163,050. a. Compute Franco's basis in Dulera after the distribution. b. Compute Franco's basis in the equipment he received from Dulera.
Transcribed Image Text:Exercise 14-6 (Algorithmic) (LO. 4, 5) Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $217,400. The fair market value of the interest is $239,140. Dulera then distributes to Franco $43,480 cash and equipment with an adjusted basis of $108,700 and a fair market value of $163,050. a. Compute Franco's basis in Dulera after the distribution. b. Compute Franco's basis in the equipment he received from Dulera.
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