How much is the recognized gain or loss

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Problem - Marcus and Madison are equal members of an LLC. On January 1 of the current year, to acquire a one-third interest in the entity, Nora contributed a parcel of land she had held for investment. (At this time, the entity will be renamed MMN LLC.) Nora had purchased the land for $120,000; it's fair market value was $90,000 at the contribution date. A few years later, the LLC sells Nora's land for $84,000. At the beginning of that year, Nora's tax basis capital account was $200,000 and Marcus and Madison's tax basis capital accounts were $170,000.

Required -

a. How much is the recognized gain or loss? How is it allocated among the LLC members?

b. Use Microsoft Excel to prepare schedules that roll the partners' tax basis capital accounts forward from before to immediately after the sale.

Reference no: EM132663263

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