In X1, Adam and Jason Formed ABC, LLC, a Car

question 54

Multiple Choice

In X1, Adam and Jason formed ABC, LLC, a car dealership in Kansas City. In X2, Adam and Jason realized they needed an advertising expert to assist in their business. Thus, the two members offered Cory, a marketing expert, a one-third capital interest in their partnership for contributing his expert services. Cory agreed to this arrangement and received his capital interest in X2. If the value of the LLC's capital equals $180,000 when Cory receives his one-third capital interest, which of the following tax consequences does not occur in X2?

• A)Cory reports $60,000 of ordinary income in X2.
• B)Adam, Jason, and Cory receive an ordinary deduction of $20,000 in X2.
• C)Adam and Jason receive an ordinary deduction of $30,000 in X2.
• D)Cory reports $60,000 of ordinary income in X2, and Adam and Jason receive an ordinary deduction of $30,000 in X2.

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Definitions:

Social Perspective

A viewpoint that focuses on the behavior of individuals as influenced by the social structures and cultural norms within which they operate.

Primate Species

Members of the mammalian order Primates, which includes humans, apes, monkeys, and prosimians like lemurs and tarsiers.

Extinction

The permanent loss of a species or other taxonomic unit of organisms, typically a result of habitat destruction, predation, competition, or catastrophic environmental change.

Democratic Republic Of Congo

A large country located in Central Africa, known for its rich natural resources, complex history of conflict, and diverse cultures.