At the beginning of the tax year, Melodie's basis in the MIP LLC was $88,000, including...

 

Transcribed Image Text:

At the beginning of the tax year, Melodie's basis in the MIP LLC was $88,000, including her $57,200 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $13,200 and inventory (basis of $10,560, fair market value of $13,200). In addition, MIP repaid all of its liabilities by the end of the year. a. If this is a proportionate current distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? If this is a proportionate current distribution, the cash distribution plus relief of liabilities decrease ✔ Melodie's basis to After the distribution of inventory, what is Melodie's basis in the inventory and in her MIP interest? Basis in inventory Basis in MIP Feedback Check My Work 10,560 b. Would your answers to part (a) change if this had been a proportionate liquidating distribution? of $ If this had been a proportionate liquidating distribution, then Melodie would have recognized a loss ✓ basis in the inventory would have been s . and her At the beginning of the tax year, Melodie's basis in the MIP LLC was $88,000, including her $57,200 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $13,200 and inventory (basis of $10,560, fair market value of $13,200). In addition, MIP repaid all of its liabilities by the end of the year. a. If this is a proportionate current distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? If this is a proportionate current distribution, the cash distribution plus relief of liabilities decrease ✔ Melodie's basis to After the distribution of inventory, what is Melodie's basis in the inventory and in her MIP interest? Basis in inventory Basis in MIP Feedback Check My Work 10,560 b. Would your answers to part (a) change if this had been a proportionate liquidating distribution? of $ If this had been a proportionate liquidating distribution, then Melodie would have recognized a loss ✓ basis in the inventory would have been s . and her At the beginning of the tax year, Melodie's basis in the MIP LLC was $88,000, including her $57,200 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $13,200 and inventory (basis of $10,560, fair market value of $13,200). In addition, MIP repaid all of its liabilities by the end of the year. a. If this is a proportionate current distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? If this is a proportionate current distribution, the cash distribution plus relief of liabilities decrease ✔ Melodie's basis to After the distribution of inventory, what is Melodie's basis in the inventory and in her MIP interest? Basis in inventory Basis in MIP Feedback Check My Work 10,560 b. Would your answers to part (a) change if this had been a proportionate liquidating distribution? of $ If this had been a proportionate liquidating distribution, then Melodie would have recognized a loss ✓ basis in the inventory would have been s . and her At the beginning of the tax year, Melodie's basis in the MIP LLC was $88,000, including her $57,200 share of the LLC's liabilities. At the end of the year, MIP distributed to Melodie cash of $13,200 and inventory (basis of $10,560, fair market value of $13,200). In addition, MIP repaid all of its liabilities by the end of the year. a. If this is a proportionate current distribution, what is the tax effect of the distribution to Melodie and MIP? After the distribution, what is Melodie's basis in the inventory and in her MIP interest? If this is a proportionate current distribution, the cash distribution plus relief of liabilities decrease ✔ Melodie's basis to After the distribution of inventory, what is Melodie's basis in the inventory and in her MIP interest? Basis in inventory Basis in MIP Feedback Check My Work 10,560 b. Would your answers to part (a) change if this had been a proportionate liquidating distribution? of $ If this had been a proportionate liquidating distribution, then Melodie would have recognized a loss ✓ basis in the inventory would have been s . and her

Answer rating: 100% (QA)

Solution a Step 11 Cash distributions 1320057200 70400 The d... View the full answer