Frank and Bob are equal members in Soxy Socks, LLC. When forming the LLC, Frank contributed $50,000 in cash and $50,000 worth of equipment. Frank's adjusted basis in the equipment was $35,000. Bob contributed $50,000 in cash and $50,000 worth of land.Bob's adjusted basis in the land was $30,000. On 3/15/X4, Soxy Socks sells the land Bob contributed for $60,000. How much gain (loss) related to this transaction will Bob report on his X4 return?
A) $35,000.
B) $25,000.
C) $10,000.
D) $15,000.

Question

Quizplus · Accepted Answer

Bob's adjusted basis in the land was $30,000, and he sold it for $60,000. Therefore, Bob has a $30,000 gain ($60,000 selling price - $30,000 adjusted basis).

Frank and Bob Are Equal Members in Soxy Socks, LLC