Compute any gain or loss dave may have to recognize

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Reference no: EM133901372

Problem

ave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Basis Fair Market Value Assets: Cash $ 120,000 $ 120,000 Investments 170,000 193,000 Land 260,000 430,000 Totals $ 550,000 $ 743,000 Liabilities and capital: Nonrecourse liabilities $ 140,000 $ 140,000 Tatsuki* 205,000 301,500 Robert* 205,000 301,500 Totals $ 550,000 $ 743,000. Get the instant assignment help. Compute and characterize any gain or loss Dave may have to recognize as a result of his admission to Cirque Capital.

Reference no: EM133901372

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