Emma's basis in her BBDE LLC interest is $60,000 at the beginning of the tax year.Her allocable share of LLC items are as follows: $20,000 of ordinary income, $2,000 tax-exempt interest income, and a $6,000 long-term capital gain.In addition, the LLC distributed $12,000 of cash to Emma during the year.Assuming the LLC had no liabilities at the beginning or the end of the year, Emma's ending basis in her LLC interest is $88,000.

Question

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Emma's ending basis is calculated as: $60,000 (beginning basis) + $20,000 (ordinary income) + $2,000 (tax-exempt interest) + $6,000 (long-term capital gain) - $12,000 (cash distribution) = $76,000.

Emma's Basis in Her BBDE LLC Interest Is $60,000 at the Beginning