Sweeney originally contributed $175,000 in cash for a one-fourth interest in the Gilbert LLC. During the time Sweeney was a member of the LLC, his share of the LLC’s income was $90,000 and he withdrew $75,000 cash. The LLC’s liabilities are $80,000, of which Sweeney’s share is $20,000.
Sweeney sells his LLC interest to Jana for $225,000 cash, with Jana assuming Sweeney’s share of the LLC’s liabilities.
How much is Sweeney’s gain on the sale, and how much is Jana’s adjusted basis for her LLC interest?