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Question: current tax interest is value of Franco owns a 60% interest in the Dulera LLC. On December 31 of the year, his basis in the LLC $128,000. The fair market theinterest is $140,000. In a proportionate nonliquidating distribution, the LLC distrib- utes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received?

Question: current tax interest is value of Franco owns a 60% interest in the Dulera LLC. On December 31 of the year, his basis in the LLC $128,000. The fair market theinterest is $140,000. In a proportionate nonliquidating distribution, the LLC distrib- utes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received?

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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Question: current tax interest is value of Franco owns a 60% interest in the Dulera LLC. On December 31 of the year, his basis in the LLC $128,000. The fair market theinterest is $140,000. In a proportionate nonliquidating distribution, the LLC distrib- utes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received?
Transcribed Image Text:Question: current tax interest is value of Franco owns a 60% interest in the Dulera LLC. On December 31 of the year, his basis in the LLC $128,000. The fair market theinterest is $140,000. In a proportionate nonliquidating distribution, the LLC distrib- utes $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000 to him on that date. How much is Franco's adjusted basis in the LLC interest after the distribution and what is the amount of his basis in the equipment received?
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