Feela is a one-third owner of Alchemy LLC, which is taxed as a partnership. Her basis prior

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Feela is a one-third owner of Alchemy LLC, which is taxed as a partnership. Her basis prior to Alchemy paying Feela an $11,000 cash distribution is $6,000. How much income does Feela recognize from the distribution and what is her basis in her interest in Alchemy after the distribution?

a. $11,000 income and $6,000 basis

b. $6,000 income and $5,000 basis

c. $5,000 income and $0 basis

d. $0 income and negative $5,000 basis

e. None of these choices

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Income Tax Fundamentals 2023

ISBN: 9780357719527

41st Edition

Authors: Gerald E. Whittenburg, Steven Gill

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