Erica and Brett decide to form their new motorcycle business as an LLC. Each will receive...

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

Expert Solution

Answer :- Brett's outside tax basis in his LLC interest $45,000.

Calculation :-

jeff jeffy answered 2 years ago

Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that

Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a partnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materially participate in the business. In 2019, TGPS reports a net loss of $580,000. What are the implications of this loss for Timothy and Prada?

Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC...

Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a partnership). Timothy is married, and Prada is single. Each contributes $400,000 of capital to begin the business, and both materially participate in the business. In 2019, TGPS reports a net loss of $580,000. What are the implications of this loss for Timothy and Prada? If an amount is zero, enter "0". Timothy has an excess business loss...

Timothy Gates and Prada Singh decide to form a new company, TGPS LLC (a multimember LLC that will report its operations as a partnership).

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