Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in...

Question

Question

Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in...

Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $52,000 of accounts payable and no other debt. The current fair market value of Winterhaven’s capital is $200,000.

If Connie receives a 5 percent capital and profits interest, how much income must she report and what is her tax basis in the LLC interest?

business accounting

Add a comment Improve this question Transcribed image text

Answer 1

Answer #1

Add a comment

Answer 2

Similar Homework Help Questions

Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in...

Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $35,000 of accounts payable and no other debt. The current fair market value of Winterhaven’s capital is $300,000. (Leave no answer blank. Enter zero if applicable.) a. If Connie receives a 5 percent capital interest only, how much income must she report and what is her tax basis in the LLC interest? b. If Connie receives a...
Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in...

Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital’s balance sheet on the day Dave received his capital interest appears below: Basis Fair Market Value Assets: Cash $ 210,000 $ 210,000 Investments 100,000 126,000 Land 290,000 420,000 Totals $ 600,000 $ 756,000 Liabilities and capital:...
Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchangefor legal services...

Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchangefor legal services she provided. In addition to her share of partnership prohts or losses, she receives a $30,000/guaranteed payment gach year for ongoing services she provides to the LLC Eor X4 Bright Line reported-the following revenues'and expenses: Sales $150,000 Cost of Goods Sold $90,000Depreciation Expense $12,000) Long-Term Capital Gains $15.000, Qualified Dividends $6,000, and Munic pal Bond Interest $3,000. How much ornary bueas eame floss will...

Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal...

Kim received a 1/3 profits and capital interest in Bright Line, LLC in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $30,000 guaranteed payment each year for ongoing services she provides to the LLC. For X4, Bright Line reported the following revenues and expenses: Sales $150,000, Cost of Goods Sold $90,000, Depreciation Expense $12,000, Long-Term Capital Gains $15,000, Qualified Dividends $6,000, and Municipal Bond Interest $3,000. How much ordinary...
Kim received a 1/3 profits and capital interest in Bright Line. LLC in exchange for legal...

Kim received a 1/3 profits and capital interest in Bright Line. LLC in exchange for legal services she provided. In addition to her share of partnership profits or losses, she receives a $35.000 guaranteed payment each year for ongoing services she provides to the LLC. For X4. Bright Line reported the following revenues and expenses: Sales - $155,000. Cost of Goods Sold - $95.000. Depreciation Expense - $52.000. Long-Term Capital Gains - $20.000. Qualified Dividends - $6.500, and Municipal Bond...
When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25...

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 $ 25,000 $ 25,000 Land* 115,000 385,750 Totals $ 140,000 $ 410,750 *Nonrecourse debt secured by the land equals $162,000 James, Harold, and Jenny each contributed $248,750 in cash for a 25 percent profits and capital interest. b. What is Maude’s tax basis in her LLC interest? c. What tax...

When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25...

When High Horizon LLC was formed, Maude contributed the following assets in exchange for a 25 percent capital and profits interest in the LLC: Maude: Basis Fair Market Value Cash $ 25,000 $ 25,000 Land* 100,000 350,000 Totals $ 125,000 $ 375,000 *Nonrecourse debt secured by the land equals $160,000 James, Harold and Jenny each contributed $220,000 in cash for a 25% profits and capital interest. What is Maude’s tax basis in her LLC interest?
Amy and Mitchell share equally in the profits, losses and capital of the accrual basis AM...

Amy and Mitchell share equally in the profits, losses and capital of the accrual basis AM Products LLC. Amy is a managing member of the LLC (treated as a partner) and is a U.S. person. At the beginning of the current year, Amy’s capital account has a balance of $300,000, and the LLC has debts of $200,000 payable to unrelated parties. The debts are recourse to the LLC but neither of the LLC members had personally guaranteed them. Assume that...
Mackenzie is considering conducting her business, Mac561, as either a single-member LLC or as an S...

Mackenzie is considering conducting her business, Mac561, as either a single-member LLC or as an S corporation. Assume her marginal ordinary income tax rate is 37 percent, her marginal FICA rate on employee compensation is 1.45 percent, her marginal self-employment tax rate is 2.9 percent, and any employee compensation or self-employment income she receives is subject to the 0.9 percent additional Medicare tax. Also, assume Mac561 generated $200,000 of business income before considering the deduction for compensation Mac561 pays to...

Mackenzie is considering conducting her business, Mac561, as either a single member LLC or as an...

Mackenzie is considering conducting her business, Mac561, as either a single member LLC or as an S corporation. Determine Mackenzie’s after-tax cash flow from the entity’s business income and any compensation she receives from the business assuming her marginal ordinary income tax rate is 37 percent, her marginal FICA rate on employee compensation is 1.45 percent, her marginal self-employment tax rate is 2.9 percent, and any employee compensation or self-employment income she receives is subject to the 0.9 percent additional...

Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in...

Homework Answers