Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year,

Question:

Franco owns a 60% interest in the Dulera LLC. On December 31 of the current tax year, his basis in the LLC interest is $128,000. The fair market value of the interest is $140,000. Dulera then distributes to Franco $30,000 cash and equipment with an adjusted basis of $5,000 and a fair market value of $8,000.
a. Compute Franco's basis in Dulera after the distribution.
b. Compute Franco's basis in the equipment that he received from Dulera?