What is the character of the recognized amount

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roblem 1: Hank has a 30% interest in KKC LLC, a calendar year entity. At the beginning of the year, Hank had an outside basis in KKC of $60,000 which included his $10,000 share of KKC liabilities. On July 1st, Hank sells his interest to Benji for $95,000 cash. Benji assumes Hank's share of LLC liabilities which is now $8,000. KKC earned $120,000 evenly throughout the year. Hank's share of unrealized receivables is $7,000 ($0 basis). At the time of sale, what is Hank's outside basis in the LLC, what must he recognize on the sale, and what is the character of the recognized amount?

Reference no: EM132842357

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