Prepare a tax basis balance sheet for the high horizon

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Question - When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC:

  Basis Fair Market Value
Maude:    
Cash $25,750 $25,750
Land* 115,500 373,000
Totals $141,250 $398,750

Nonrecourse debt secured by the land equals $177,500

James, Harold, and Jenny each contributed $221,250 in cash for a 25 percent profits and capital interest. (Negative amounts should be indicated by a minus sign. Leave no answer blank. Enter zero if applicable.)

a. What is Maude's tax basis in her LLC interest?

b. What tax basis do James, Harold, and Jenny have in their LLC interests?

c. What is High Horizon's tax basis in its assets?

d. Prepare a tax basis balance sheet for the High Horizon LLC showing the tax capital accounts for the members.

Reference no: EM131732596

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