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What is her tax basis in the LLC interest

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Reference no: EM132462811

Problem - Connie recently provided legal services to the Winterhaven LLC and received a 5 percent interest in the LLC as compensation. Winterhaven currently has $50,000 of accounts payable and no other debt. The current fair market value of Winterhaven's capital is $200,000.

Required -

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 5 percent profits interest only, how much income must she report and what is her tax basis in the LLC interest?

c) 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?

Reference no: EM132462811

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