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satela [25.4K]
3 years ago
15

Dusan is a member of the Tonda LLC, and all members have equal interests in capital and profits. The LLC has made an optional ad

justment-to-basis election. Dusan's interest is sold to Adele for $35,000. The balance sheet of the LLC immediately before the sale shows the following:
Basis FMV
Cash $40,000 $40,000
Depreciable assets 80,000 100,000
$120,000 $140,000
Dusan, capital $30,000 $35,000
Randal, capital 30,000 35,000
Thom, capital 30,000 35,000
Erin, capital 30,000 35,000
$120,000 $140,000
a. How much is the 754 adjustment?

b. What is the amount of Adele's basis in the acquired interest?

c. Which partner receives deductions related to the step-up?
Business
1 answer:
Sergio [31]3 years ago
4 0

Answer: a. $5000 b. $35000 c. Adele

Explanation:

The balance sheet is a report which summarizes all of an entity's assets, the liabilities, and the equity at a given point in time.

Based on the balance sheet in the question, the following can be calculated:

a. The 754 adjustment will be the difference in the sale of interest and Susan's capital balance. This will be:

= Sale of interest - Dusan's capital balance

= $35,000 - $30,000

= $5000

b. Adele's basis in the acquired interest will be the value at which she acquired the interest. This will be = $35,000

c. Adele is the partner who receives deductions related to the step-up

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