Reference no: EM133155233

Question - Discuss the tax consequences (recognition, realization) for Alice.

A. In exchange for a 79% interest worth $60,000, Alice transfers two assets to the Rein LLC on the day the entity is created, Jan 21 st 2022. She contributes cash of $40,000 and retail display equipment (basis to her as a sole proprietor, $8,000; fair market value, $20,000).

B. Now, Five years on, after Rein LLC was created, Alice contributes another piece of property to the entity, for another 6% stake in the LLC which now brings her total interest to 85%. Thisproperty has a basis of $35,000 and a fair market value of $50,000.

C. Emma, John and Laine form the equal EL Partnership. Emma contributes cash of $100,000. Laine contributes property with an adjusted basis of $40,000 and a fair market value of $100,000and John commits two years of managerial and executive services as his contribution to the LLC inreturn for $100,000 interest in the partnership. Discuss the Tax consequences for each.