The BLM LLC's balance sheet on August 31 of the current year is as follows.
The nonrecourse debt is shared equally among the LLC members. On that date, Lillie sells her one-third interest to Robyn for $170,000, including cash and relief of Lillie's share of the nonrecourse debt. Lillie's outside basis for her interest in the LLC is $50,000, including her share of the LLC's debt. How much capital gain and/or ordinary income will Lillie recognize on the sale?
A) $100,000 capital gain; $50,000 ordinary income.
B) $120,000 capital gain; $0 ordinary income.
C) $150,000 capital gain; $0 ordinary income.
D) $70,000 capital gain; $50,000 ordinary income.
E) None of the above.
Correct Answer:
Verified
Q61: A partnership may make an optional election
Q63: Tom, Tina, Tatum, and Terry are equal
Q64: The RST Partnership makes a proportionate distribution
Q66: Last year, Darby contributed land (basis of
Q68: Which of the following transactions will not
Q69: Last year, Miguel contributed nondepreciable property with
Q74: In a proportionate liquidating distribution, Ashleigh receives
Q149: Which of the following statements correctly reflects
Q150: In a proportionate liquidating distribution, Sam receives
Q222: In a proportionate liquidating distribution, Sara receives
Unlock this Answer For Free Now!
View this answer and more for free by performing one of the following actions
Scan the QR code to install the App and get 2 free unlocks
Unlock quizzes for free by uploading documents