Anna and Makenzie formed an LLC called A&M Company, LLC  Anna and Makenzie did not make any elections regarding the tax classification of the entity. 

 

Anna contributed equipment worth $ with a basis of $ to the LLC in exchange for of the LLC interests.

Makenzie contributed $ cash to the LLC in exchange for of the LLC interests.

In the first year of operations, the LLC had the following items of income and deduction:

$ gross operating income

$ operating expenses utilities supplies, etc.

$ shortterm capital gain from the sale of an investment property

At the end of the first year, the LLC distributed $ to Anna and $ to Makenzie.

Please discuss and explain the tax consequences of the transactions listed above.

Answer rating: 100% (QA)

The tax consequences of the transactions listed above in the context of Anna and Makenzies LLC can be explained as follows 1 Contributions to the LLC ... View the full answer