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How much is Sweeney's gain on the sale, and what is its character? Sweeney's total gain on the sale is $ 27,120, of which $ X recognized as ordinary income, with the remaining X recognized as a long-term capital gain.

How much is Sweeney's gain on the sale, and what is its character? Sweeney's total gain on the sale is $ 27,120, of which $ X recognized as ordinary income, with the remaining X recognized as a long-term capital gain.

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 21-25 (Algorithmic) (LO. 15) Sweeney originally contributed $226,000 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 $135,600 and he withdrew $90,400 cash. The LLC's liabilities are $113,000, of which Sweeney's share is $28,250. The LLC has $56,500 of hot assets, of which Sweeney's share is $14,125. Sweeney sells his LLC interest to Jana for $298,320 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 $ 27,120, of which $ X recognized as ordinary income, with the remaining X recognized as a long-term capital gain. How much is Jana's adjusted basis for her LLC interest? 326,570
Transcribed Image Text:Exercise 21-25 (Algorithmic) (LO. 15) Sweeney originally contributed $226,000 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 $135,600 and he withdrew $90,400 cash. The LLC's liabilities are $113,000, of which Sweeney's share is $28,250. The LLC has $56,500 of hot assets, of which Sweeney's share is $14,125. Sweeney sells his LLC interest to Jana for $298,320 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 $ 27,120, of which $ X recognized as ordinary income, with the remaining X recognized as a long-term capital gain. How much is Jana's adjusted basis for her LLC interest? 326,570
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