What is the amount and character of Wesley's recognized gain or loss?

2. If the LLC has a §754 election in place, what is the amount of the special basis adjustment and what effect does it have on the partnership books - assuming they are kept on the tax basis?

 

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Bud, Lawson, and Wesley Ford each own an interest in Ford Brothers LLC. Their respective interests are listed below and the basis of each of their interests is shown. Wesley is exiting as an owner and receives a distribution of $15,000 cash from the LLC in complete liquidation of his interest. The company has the followin balance sheet: Assets: Cash Stock (investment) Land Totals Liabilities and capital: Capital Bud 40% - Lawson - 40% - Wesley - 20% Totals Tax Basis $ 26,200 7,300 66,000 $99,500 39,800 39,800 19,900 $99,500 FMV $ 26,200 9,200 39,600 $75,000 Bud, Lawson, and Wesley Ford each own an interest in Ford Brothers LLC. Their respective interests are listed below and the basis of each of their interests is shown. Wesley is exiting as an owner and receives a distribution of $15,000 cash from the LLC in complete liquidation of his interest. The company has the followin balance sheet: Assets: Cash Stock (investment) Land Totals Liabilities and capital: Capital Bud 40% - Lawson - 40% - Wesley - 20% Totals Tax Basis $ 26,200 7,300 66,000 $99,500 39,800 39,800 19,900 $99,500 FMV $ 26,200 9,200 39,600 $75,000

Answer rating: 100% (QA)

I Wesleys Recognized Gain or Loss Cash Distribution 15000 Adjusted Basis in Partnership Interest 20 ... View the full answer