Question

Harry and Sally formed the Evergreen Partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership: BasisFair Market ValueHarry: Cash$ 30,000$ 30,000Land100,000120,000Totals$ 130,000$ 150,000Sally: Equipment used in a business200,000150,000Totals$ 200,000$ 150,000 Note: Leave no answer blank. Enter zero if applicable. a. How much gain or loss will Harry recognize on the contribution? Rania contributed equipment worth $175,000, purchased 8 months ago for $203,500 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 15 percent profits and capital interest in the LLC. Rania agreed to guarantee all $18,900 of Sand Creek's accounts payable, but she did not guarantee any portion of the $87,500 nonrecourse mortgage securing Sand Creek's office building. Other than the accounts payable and mortgage, Sand Creek does not have any liabilities to other creditors. a. What is Rania's initial tax basis in her LLC interest? Rania contributed equipment worth $175,000, purchased 8 months ago for $203,500 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 15 percent profits and capital interest in the LLC. Rania agreed to guarantee all $18,900 of Sand Creek's accounts payable, but she did not guarantee any portion of the $87,500 nonrecourse mortgage securing Sand Creek's office building. Other than the accounts payable and mortgage, Sand Creek does not have any liabilities to other creditors. a. What is Rania's initial tax basis in her LLC interest?

Harry and Sally formed the Evergreen Partnership by contributing the following assets in exchange for a 50 percent capital and profits interest in the partnership:
BasisFair Market ValueHarry: Cash$ 30,000$ 30,000Land100,000120,000Totals$ 130,000$ 150,000Sally: Equipment used in a business200,000150,000Totals$ 200,000$ 150,000
Note: Leave no answer blank. Enter zero if applicable.
a. How much gain or loss will Harry recognize on the contribution?
Rania contributed equipment worth $175,000, purchased 8 months ago for $203,500 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 15 percent profits and capital interest in the LLC. Rania agreed to guarantee all $18,900 of Sand Creek's accounts payable, but she did not guarantee any portion of the $87,500 nonrecourse mortgage securing Sand Creek's office building. Other than the accounts payable and mortgage, Sand Creek does not have any liabilities to other creditors.
a. What is Rania's initial tax basis in her LLC interest?
Rania contributed equipment worth $175,000, purchased 8 months ago for $203,500 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 15 percent profits and capital interest in the LLC. Rania agreed to guarantee all $18,900 of Sand Creek's accounts payable, but she did not guarantee any portion of the $87,500 nonrecourse mortgage securing Sand Creek's office building. Other than the accounts payable and mortgage, Sand Creek does not have any liabilities to other creditors.
a. What is Rania's initial tax basis in her LLC interest?

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