Assume the same facts as in Problem 11, with the following exceptions. Reece purchased the land

Question:

Assume the same facts as in Problem 11, with the following exceptions.

• Reece purchased the land five years ago for $120,000. Its fair market value was

$90,000 when it was contributed to Phoenix.

• Phoenix sold the land contributed by Reece for $84,000.

a. How much is the recognized gain or loss? How is it allocated among the LLC members?

b. Prepare a balance sheet reflecting basis and fair market value for the LLC immediately after the land sale. Complete schedules that support the tax basis and fair market value of each LLC member's capital account.

Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...