Dusan is a member of the Tonda LLC, and all members have equal interests in capital and profits. The LLC has made an optional adjustment-to-basis election. Dusan's interest is sold to Adele for $66,500. The balance sheet of the LLC immediately before the sale shows the following. Basis FMV Cash$76,000$76,000Depreciable assets15,200190,000 $91,200$266,000Dusan, capital$22,800$66,500Randal, capital22,80066,500Thom, capital22,80066,500Erim, capital22,80066,500 $91,200$266,000 a. How much is the § 754 adjustment?$________________b. What is the amount of Adele's basis in the acquired interest?$___________________c. Which partner receives deductions related to the step-up?(Adele, Dusan, Both Adele and Dusan)

LLC, the Limited Liability Corporation is the type of business organization were the owners of the…

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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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Dusan is a member of the Tonda LLC, and all members have equal interests in capital and profits. The LLC has made an optional adjustment-to-basis election. Dusan's interest is sold to Adele for $66,500. The balance sheet of the LLC immediately before the sale shows the following.

	Basis		FMV
Cash	$76,000	$76,000
Depreciable assets	15,200	190,000
	$91,200	$266,000
Dusan, capital	$22,800	$66,500
Randal, capital	22,800	66,500
Thom, capital	22,800	66,500
Erim, capital	22,800	66,500
	$91,200	$266,000

a. How much is the § 754 adjustment?
$________________

b. What is the amount of Adele's basis in the acquired interest?
$___________________

c. Which partner receives deductions related to the step-up?

(Adele, Dusan, Both Adele and Dusan)

Definition Definition Financial statement that provides a snapshot of an organization's financial position at a specific point in time. It summarizes a company's assets, liabilities, and shareholder's equity, detailing what the company owns, what it owes, and what is left over for its owners. The balance sheet serves as a crucial tool to assess the financial health and stability of a company, as well as to help management make informed decisions about its future investments and financial obligations.

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