Member A has an adjusted basis in his membership interest in Net Big Partnership of $8,000. Net Big liquidates completely and distributes a piece of real estate to Member A in which Net Big has a basis of $8,000 and which has a fair market value of $10,000.
a. What is Member A's basis in the real estate received from Net Big?
b. Does Member A have a gain or loss as a result of the distribution? In so, how much?
c. Explain your answers to parts a and b.
Member P has an outside basis in his interest in Bing LLC of $10,000 and in 2007, the flowing transactions take place:
• $25,000 in LLC taxable income is allocated to him;
• $2,000 in LLC tax exempt is allocated to him;
• His share of increased LLC liabilities is $5,000;
• $24,000 is distributed to him by the LLC;
• His share of decreased LLC liabilities is $4,000.
a. What is Member P's basis at the end of 2009?
b. Explain your answer to part a.
Member A has an adjusted basis in his membership interest in Net Big Partnership of $6,000. Net Big liquidates completely and distributes a piece of real estate to Member A in which Net Big has a basis of $6,000 and which has a fair market value of $10,000.
a. What is Member A's basis in the real estate received from Net Big?
b. Does Member A have a gain or loss as a result of the distribution? In so, how much?
c. Explain your answers to parts a and b.