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Lance contributed investment property worth $512,500, purchased Five years ago for $210,000 cash, to Cloud Peak...

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Accounting

Lance contributed investment property worth $512,500, purchasedFive years ago for $210,000 cash, to Cloud Peak LLC in exchange foran 65 percent profits and capital interest in the LLC. Cloud Peakowes $520,000 to its suppliers but has no other debts. a. What isLance’s tax basis in his LLC interest? b. What is Lance’s holdingperiod in his interest? c. What is Cloud Peak’s basis in thecontributed property? d. What is Cloud Peak’s holding period in thecontributed property?

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4.1 Ratings (627 Votes)
Part a The value of Lances tax basis in his LLC is arrived as below Lances Tax Basis in his LLC Interest Value Purchase Price of Investment Property Transferred to LLC Portion of LLCs Debt Substituting values    See Answer
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