Question

Sweeney originally contributed $302,000 in cash for a one-fourth interest in the Gilbert LLC. During the several years that Sweeney was a member of the LLC, his share of the LLC's income was $181,200 and he withdrew $120,800 cash. The LLC's liabilities are $151,000, of which Sweeney's share is $37,750. The LLC has $75,500 of hot assets, of which Sweeney's share is $18,875. Sweeney sells his LLC interest to Jana for $398,640 cash, with Jana also assuming Sweeney's share of the LLC's liabilities.

How much is Sweeney's gain on the sale, and what is its character?

Sweeney's total gain on the sale is $__________, of which $_________ recognized as ordinary income, with the remaining $________ recognized as a long-term capital gain.

How much is Jana's adjusted basis for her LLC interest? $___________

Answer 1

Answer 1) Sweeney Total Contribution - 30200 2) Sweeney brain by this contribution in the Long term chain -Sweeney's share at the's Income 2 18120 & - Sweeney share of uld's Assels - 18815 & Long term hain by a gerors of Sweeney Contribution (3) Ordinary Income is a Income that is usually characterized as Income other then long term Capital guins. - Sweeney sells his Interest to Jana Against Cash = 398648 - Cless his Contribution) -302000 (Add his LLC's share of Liabilities +37750 91 that is also transter to Jann) Ordinary Income 1343908

4 Total Grain to Sweeny on the hall - Loy tum capital Gerint ordinary in come 20007s & + 134390 & Total Gain = 3344658 I Jana Contribution for her basis Interest in LLC 2 Total Cash froid to Swechey + Total Liabilities share of Sweeney transfer to Jang - 398640 & + 37750 8 Total Contribution by Jana = 436390$