Mo Burrow owns a 25% interest in Bengal LLC. On December 31, 2021, Mo Burrow's basis in the LLC is $40,000 and its fair market value is $70,000. On that date, the LLC distributes $25,000 in cash and a parcel of land to Mo Burrow that s worth $30,000 but in which the LLC has a basis of $13,000.

a. What is the gain or loss recognized by Mo Burrow and Bengal LLC on this distribution?

b. What is Mo Burrow's basis in the LLC after the distribution?

c. What is Mo Burrow's basis in the parcel of land that was distributed to him?

d. If Mo Burrow sells the parcel of land on January 1, 2022, for value, will Mo Burrow recognize a gain or a loss? (show your calculations)

Answer rating: 100% (QA)

a The gain recognized by Mo Burrow would be 17000 The gain recognized by Bengal LLC would be 4000 Th... View the full answer