[The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Lanu Totals Liabilities and capital: Nonrecourse liabilities Tatsuki* Robert* Totals Tax basis $ Dave 0 Basis *Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Tatsuki $ 150,000 200,000 150,000 $ 500,000 b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest. Robert $ 100,000 200,000 200,000 $500,000 Fair Market Value $ 150,000 700,000 250,000 $ 1,100,000 $ 100,000 500,000 500,000 $ 1,100,000
[The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Lanu Totals Liabilities and capital: Nonrecourse liabilities Tatsuki* Robert* Totals Tax basis $ Dave 0 Basis *Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Tatsuki $ 150,000 200,000 150,000 $ 500,000 b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest. Robert $ 100,000 200,000 200,000 $500,000 Fair Market Value $ 150,000 700,000 250,000 $ 1,100,000 $ 100,000 500,000 500,000 $ 1,100,000
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Required information
[The following information applies to the questions displayed below.]
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting
services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as
compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below:
Assets:
Cash
Investments
Land
cana
Totals
Liabilities and capital:
Nonrecourse liabilities
Tatsuki*
Robert*
Totals
Tax basis
$
Dave
0
Basis
*Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their
respective shares of nonrecourse liabilities.
Note: Leave no answer blank. Enter zero if applicable.
Tatsuki
$ 150,000
200,000
150,000
$ 500,000
b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest.
Robert
$ 100,000
200,000
200,000
$ 500,000
Fair Market
Value
$ 150,000
700,000
250,000
$ 1,100,000
$ 100,000
500,000
500,000
$ 1,100,000](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2Fbe9e1f05-8cfa-47e6-8c70-4fac4f205f6e%2Faa43baaa-df85-4c3a-b85c-ea7bfee1a8fd%2Fewsol6a_processed.png&w=3840&q=75)
Transcribed Image Text:!
Required information
[The following information applies to the questions displayed below.]
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting
services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as
compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below:
Assets:
Cash
Investments
Land
cana
Totals
Liabilities and capital:
Nonrecourse liabilities
Tatsuki*
Robert*
Totals
Tax basis
$
Dave
0
Basis
*Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their
respective shares of nonrecourse liabilities.
Note: Leave no answer blank. Enter zero if applicable.
Tatsuki
$ 150,000
200,000
150,000
$ 500,000
b. Compute each member's tax basis in his LLC interest immediately after Dave's receipt of his interest.
Robert
$ 100,000
200,000
200,000
$ 500,000
Fair Market
Value
$ 150,000
700,000
250,000
$ 1,100,000
$ 100,000
500,000
500,000
$ 1,100,000
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