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

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.

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