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AnnyKZ [126]
3 years ago
8

Erica and Brett decide to form their new motorcycle business as an LLC. Each will receive an equal profits (loss) interest by co

ntributing cash, property, or both. In addition to the members' contributions, their LLC will obtain a $52,000 nonrecourse loan from First Bank at the time it is formed. Brett contributes cash of $6,000 and a building he bought as a storefront for the motorcycles. The building has an FMV of $47,000 and an adjusted basis of $32,000 and is secured by a $37,000 nonrecourse mortgage that the LLC will assume. What is Brett's outside tax basis in his LLC interest
Business
1 answer:
yKpoI14uk [10]3 years ago
6 0

Answer:

Brett's outside tax basis in his LLC interest = $48,000

Explanation:

As per the data given in the question,

Cash = $6,000

Adjusted basis of building = $32,000

Debt of building = -$37,000

50% profit sharing ratio × $52,000 = $26,000

Now recourse mortgage - adjusted basis = ($37,000-$32,000)

= $5,000

Remaining mortgage on building = 50% × $32,000

= $16,000

Brett's outside tax basis in his LLC interest = $48,000

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Rus_ich [418]

Answer:

The correct answer is option C.

Explanation:

The law of diminishing marginal utility means that keeping other things at constant the marginal utility derived from the consumption of a commodity goes on declining with each additional unit of the commodity.

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In the examples given above, Wesly's case is most applicable to this.

So, option C is the correct answer.

4 0
3 years ago
A partnership has the following capital balances: Comprix (40% of gains and losses) $ 180,000 Heflin (30%) 280,000 Kaplan (30%)
MrRissso [65]

Answer:

$210,000 is the capital balance of Heflin after acquisition by Mahar

Explanation:

In this question we are asked to calculate the capital balance of Heflin given the data in the above question.

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Now, we calculate the proportionate capital transferred. That is same as 25% of the total; 25/100 * 280,000 = $70,000

The ending capital of Heflin after acquisition would be mathematically = Capital account of Heflin before admission - Ending capital of Heflin after admission= $280,000 - $70,000 = $210,000

8 0
3 years ago
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Helen [10]

Answer: a

Explanation:

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The supplier or lender of funds normally wants to earn an income and the user or borrower will generally be prepared to pay for the right to use the accumulated funds.

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So as per the given situation the above should be the answer

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