1answer.
Ask question
Login Signup
Ask question
All categories
  • English
  • Mathematics
  • Social Studies
  • Business
  • History
  • Health
  • Geography
  • Biology
  • Physics
  • Chemistry
  • Computers and Technology
  • Arts
  • World Languages
  • Spanish
  • French
  • German
  • Advanced Placement (AP)
  • SAT
  • Medicine
  • Law
  • Engineering
OLEGan [10]
2 years ago
6

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 $50,000 nonrecourse loan from First Bank at the time it is formed. Brett contributes cash of $5,000 and a building he bought as a storefront for the motorcycles. The building has an FMV of $45,000 and an adjusted basis of $30,000 and is secured by a $35,000 nonrecourse mortgage that the LLC will assume. What is Brett's outside tax basis in his LLC interest? A) $37,500. B) $40,000. C) $42,500. D) $45,000.
Business
1 answer:
koban [17]2 years ago
4 0

Answer:

Brett's outside tax basis in his LLC interest is $45000

Explanation:

A partner outside tax basis consist of basis of contributed property, partnership debt allocated to the partner without any debt relief. Non recourse debt that is more than basis of contributed property must be given to the partner that contributed to the property.

Brett's outside tax basis in his LLC interest = Cash contribution + basis of building - debt of building + Non recourse loan + non recourse mortgage + remaining mortgage on building

Cash contribution = $5000

Basis of building = $30000

Debt of building = $35000

Non recourse loan = Profit sharing ratio × Non recourse loan = 50% × $50000 = $25000

non recourse mortgage = $5000

remaining mortgage on building  = 50% × $30000 = $15000

Brett's outside tax basis in his LLC interest = $5000 + $30000 - $35000 + $25000 + $5000 + $150000 = $45000

You might be interested in
Genesis Scents has two divisions: the Cologne Division and the Bottle Division. The Bottle Division produces containers that can
ElenaW [278]

Answer: $4

Explanation:

The Bottle division is said to be able to meet all excess demand outside as well as that of the Cologne Division.

When this is the case in a company, individual divisions are allowed to transfer to each other at a rate equal to their Variable Costs. This is the general rule.

The Variable Costs for the containers is $4 so that is the transfer price as well.

7 0
2 years ago
Under which conditions, according to the Porter five-forces model, can a supplier group gain power?
Tasya [4]

Answer:

b. When there is a lack of importance of the buyer to the supplier group

Explanation:

According to Porter there are five forces that can cause rivalry in a production industry. These are supplier power, threat of new entrants, buyer power, threat of substitutes, and degree of rivalry.

Supplier power is when suppliers are able to benefit from the producers by increasing prices of inputs and gaining some industry profit. Since suppliers supply input and labour to the producer they have a greater control of there is lack of importance of the buyer to the supplier group.

This means that the supplier group has more control on price and quality it supplies to the buyer with buyer having little choice but to buy.

If however buyer is more important to the supplier it means they can control price and quality of inputs

8 0
2 years ago
g A joint product is: Select one: a. Any product which consists of several parts. b. Any product produced by a company with more
mr_godi [17]

Answer:

The correct answer is letter "D": One of several products produced from a common input.

Explanation:

Joint products are those manufactured by large companies whose production process is the same at an early stage for all the different products being produced, but at a certain stage, called a split-off, the products begin to have their own characteristics.

Since the products initially come from the same input, the costs are allocated in the bundle. After the split-off, the cost of production is allocated to each type of product.

8 0
3 years ago
With regard to New United Motor Manufacturing, Inc. (NUMMI), why did General Motors (GM) enter into a strategic alliance with To
hjlf

Answer:

to learn the lean manufacturing system pioneered by Toyota

Explanation:

The main reason for this strategic alliance was in order for General Motors to learn the lean manufacturing system pioneered by Toyota. The lean manufacturing system is a methodology derived from Toyota's 1930 operating model "The Toyota Way" which focuses on minimizing waste within manufacturing systems while at the same time being able to maximize productivity. This provides a great benefit to any manufacturing company, hence why General Motors was interested.

8 0
3 years ago
If there is little demand for a product, the price for that product will
Arte-miy333 [17]
C because when you want something less they make it cheaper hoping you’ll want it more. McDonald’s coffee is cheaper then Starbucks making it a bargain and poor people want it
5 0
3 years ago
Read 2 more answers
Other questions:
  • Amy is a package delivery service manager. she is interested in implementing ________, the management philosophy pioneered by fr
    11·1 answer
  • One of the biggest benefits of a market-based economy is
    11·1 answer
  • Garth decided to move out of a small homestead home and into a larger more expensive one. The market value of his old home at th
    7·1 answer
  • Which of the following is a trait that effective leaders demonstrate?
    14·1 answer
  • The Allowance for Bad Debts has a credit balance of $ 9 comma 500 before the adjusting entry for bad debts expense. After analyz
    14·1 answer
  • Match each of the following characteristics that describe financial accounting, managerial accounting, both financial and manage
    5·1 answer
  • Choose the statements that CORRECTLY describe a business organization.
    7·2 answers
  • Managers take broad strategic plans and turn them into operational blueprints with specific objectives and programs. The manager
    11·1 answer
  • Compared to a country with an MPS of 0.05, a country with an MPS of 0.2 would have to change government expenditures by ________
    13·1 answer
  • Which of the following is an indirect manufacturing cost in a manufacturing company?
    6·1 answer
Add answer
Login
Not registered? Fast signup
Signup
Login Signup
Ask question!