Required informationKevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed thefollowing assets:Kevan:CashLand*TotalsBasis$ 15,000120,000Assets:CashLandTotalsLiabilities and capital:Mortgage debt$ 15,000440,000$ 135,000 $ 455,000*Nonrecourse liability secured by the land equals $210,000.Each member received a one-third capital and profits interest in the LLC.Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand.Capital-KevanCapital-JerryCapital-DaveTotalse. Prepare a tax basis balance sheet for Albee LLC showing the tax capital accounts for the members. What is Kevan's share of theLLC's inside basis?Note: Enter any capital account with a debit balance as a negative amount.Albee, LLCTax Basis Balance SheetFair MarketValueTax Basis$$120,000120,0000

Albee, LLC Tax basis balance sheet Particulars Amount ($) Assets Cash 505000 Land 120000 Totals…

Answered: Required information Kevan, Jerry, and…

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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AB Corporation and YZ Corporation formed a partnership to construct a shopping mall. AB contributed $510,000 cash, and YZ contributed land ($510,000 FMV and $440,000 basis) in exchange for a 50 percent interest in ABYZ Partnership. Immediately after its formation, ABYZ borrowed $255,000 from a local bank. The debt is recourse (unsecured by any specific partnership asset). Required: a. Compute each partner's initial basis in its partnership interest, assuming that both AB and YZ are general partners. b. Compute each partner's initial basis in its partnership interest, assuming that AB is a general partner, and YZ is a limited partner. Complete this question by entering your answers in the tabs below. Required A Required B Compute each partner's initial basis in its partnership interest, assuming that AB is a general partner, and YZ is a limited partner. AB's initial basis YZ's initial basis Amount
Required information Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Kevan: Cash Land* Totals Tax basis Fair Market Value *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. Basis $ 15,000 120,000 $ 15,000 440,000 $ 135,000 $ 455,000 g. If the lender holding the nonrecourse liability secured by Kevan's land required Kevan to guarantee 1/3 of the liability and Jerry to guarantee the remaining 2/3 of the liability when Albee LLC was formed, what are the members' tax bases in their LLC interests? Kevan $285,000 X Answer is complete but not entirely correct. Jerry $ 285,000 $ Dave 285,000
. Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $110,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $70,000 and was appraised at $180,000. The land was also encumbered with a $70,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. Blue Bell made a $7,000 principal payment on the mortgage at the end of the first year. For the first year of operations, the partnership records disclosed the following information: Sales revenue $ 470,000 Cost of goods sold $ 410,000 Operating expenses $ 70,000 Long-term capital gains $ 2,400 §1231 gains $ 900 Charitable contributions $ 300 Municipal bond interest $ 300 Salary paid as a guaranteed payment to Deanne (not included in expenses) $ 3,000 What is the Qualified nonrecourse debt for Deanne and why.
Required information When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC: Fair Market Value Basis Maude: Cash Land* $ 20,000 20,000 100,000 360,000 Totals $120,000 $380,000 Nonrecourse debt secured by the land equals $160,000 James, Harold, and Jenny each contributed $220,000 in cash for a 25 percent profits and capital interest. (Leave no answer blank. Enter zero if applicable.) d. What is High Horizon's tax basis in its assets? Tax basis
Corporate Organization Exercise Kathy and Carl formed a corporation by each contributing an asset with a FMV of $50,000 for half of the stock in the corporation. Prior to the transfer, Kathy had an adjusted basis of $40,000 in her asset and Carl had an adjusted basis of $60,000 in his asset. h. Does Carl have any positive or negative consequences if the corporation sells Kathy's asset for $50,000 ? Quantify the impact assuming the corporation's marginal tax rate is 21%. Answer the following assuming Carl and the corporation did not make the election i. What is Carl's realized loss on the transaction?
Taylor and Tanner formed a partnership. Taylor contributed $50,000 in cash. Tanner contributed land and buildings he purchased for $50,000 some time ago. His tax basis in the property is now $30,000, although it was recently appraised for $70,000. There is a $15,000 mortgage attached to the building that the partnership will assume. What is the amount of Tanner’s capital account after his contribution? a. $50,000 b. $30,000 c. $35,000 d. $55,000
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Fair Market Value Basis Kevan: Cash Land* $ 15,000 120,000 $ 15,000 Totals $ 135,000 440,000 $455,000 *Nonrecourse liability secured by the land equals $210,000. Each member received a one-third capital and profits interest in the LLC. Note: Leave no answer blank. Enter zero if applicable. Round to the nearest whole thousand. b. What is Kevan's tax basis in his LLC interest? Tax basis
Sweeney originally contributed $175,000 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 $90,000 and he withdrew $75,000 cash. The LLC’s liabilities are $80,000, of which Sweeney’s share is $20,000. The LLC has $40,000 of hot assets, of which Sweeney’s share is $10,000. Sweeney sells his LLC interest to Jana for $225,000 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? How much is Jana’s adjusted basis for her LLC interest?
1. Bonnie, Olivia, Warren and Andy form Lobster Corporation with the following investments: Basis to Shares Transferor FMV Issued From Bonnie- Personal services rendered to Lobster Corporation $ -0- $30,000 30 From Olivia- Equipment $345,000 $300,000 270 From Warren- Cash Unrealized accounts receivable $60,000 -0- $60,000 90,000 150 From Andy- Land and building Mortgage on land and building $210,000 300,000 $450,000 300,000 150 The mortgage transferred by Andy is assumed by Lobster Corporation. The value of each share of Lobster Corporation stock is $1,000. Olivia receives $30,000 cash in addition to the 270 shares. Required: What are the tax consequences (i.e. realized gain/loss; recognized gain/loss; basis) to each of the transferors and Lobster Corporation as a result of the formation?
Kevan, Jerry, and Dave formed Albee LLC. Jerry and Dave each contributed $245,000 in cash. Kevan contributed the following assets: Basis Fair Market Value Kevan: Cash $15,000 $15,000 Land* 120,000 440,000 Totals $135,000 $455,000 *Nonrecourse debt secured by the land equals $210,000 Each member received a 33.33 percent capital and profits interest in the LLC. (Leave no answer blank. Enter zero if applicable. Do not round intermediate calculations.) d. What is Albee LLC’s tax basis in its assets? Tax basis
27. Sweeney originally contributed $175,000 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 $90,000 and he withdrew $75,000 cash. The LLC’s liabilities are $80,000, of which Sweeney’s share is $20,000. The LLC has $40,000 of hot assets, of which Sweeney’s share is $10,000. Sweeney sells his LLC interest to Jana for $225,000 cash, with Jana assuming Sweeney’s share of the LLC’s liabilities. How much is Sweeney’s gain on the sale, and what is its character? How much is Jana’s adjusted basis for her LLC interest? My answer. Sweeny’s gain on sale is a 125,000 and it is a capital gain. Jana’s adjusted basis is 225,000 for her LLC Interest. Please advise.
Required information [The following information applies to the questions displayed below.] Aaron, Deanne, and Keon formed the Blue Bell General Partnership at the beginning of the current year. Aaron and Deanne each contributed $124,000 and Keon transferred an acre of undeveloped land to the partnership. The land had a tax basis of $56,000 and was appraised at $180,000. The land was also encumbered with a $56,000 nonrecourse mortgage for which no one was personally liable. All three partners agreed to split profits and losses equally. At the end of the first year, Blue Bell made a $7,200 principal payment on the mortgage. For the first year of operations, the partnership records disclosed the following information: $ 480,000 470,000 70,000 1,500 600 Sales revenue Cost of goods sold Operating expenses Long-term capital gains §1231 gains Charitable contributions 300 Municipal bond interest Salary paid as a guaranteed payment to Deanne (not included in expenses) 300 3,000 c. Using the…

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