R and J form RJ, LLC, which is treated as a partnership for federal income tax...

R and J form RJ, LLC, which is treated as a partnership for federal income tax purposes. R and J agree to share profits and losses equally. Upon formation of the LLC, R transfers cash of $10,000. J transfers property with a tax basis of $6,000 and a fair market value of $14,000. The property is encumbered with a $4,000 nonrecourse liability, which the LLC assumes.

- What is J’s outside basis immediately after the formation of the LLC?

- What is J’s capital account immediately after the formation of the LLC?

- What is R’s outside basis immediately after the formation of the LLC?

- What is R’s capital account immediately after the formation of the LLC?

- What is the LLC’s inside basis in the property contributed by J?

Expert Solution

ekkarill92 answered 2 years ago

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