Avery and Blair each hold a 50% interest in the AB LLC, a limited liabilitycompany taxed as
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c) Charlie receives the interest in exchange for agreeing to act for fouryears as manager of an apartment complex that will be built on theland. (Assume that Avery and Blair each will contribute one-half ofthe cash necessary to build the apartment complex). If, however,Charlie quits working for the LLC during the four-year period, the
interest will be forfeited. Comment on the tax consequences toCharlie and whether the FMV and basis or Blackacre (or any of theLLC assets) at the end of year, four will be relevant to your answer.
d) What if the interest granted to Charlie allows him to share in one-third of all partnership profits through the date the partnership isliquidated or sold but provides him no rights upon liquidation whengranted? His interest does provide a full one-third share upon a saleof the partnership interests or assets and will provide fullliquidation rights at the end of year 5 if he is still a partner.
Related Book For
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
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