Frank and Bob Are Equal Members in Soxy Socks, LLC

question 54

Multiple Choice

Frank and Bob are equal members in Soxy Socks, LLC. When forming the LLC, Frank contributed $50,000 in cash and $50,000 worth of equipment. Frank's adjusted basis in the equipment was $35,000. Bob contributed $50,000 in cash and $50,000 worth of land.Bob's adjusted basis in the land was $30,000. On 3/15/X4, Soxy Socks sells the land Bob contributed for $60,000. How much gain (loss) related to this transaction will Bob report on his X4 return?

• A) $35,000.
• B) $25,000.
• C) $10,000.
• D) $15,000.

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Definitions:

Observational Learning

The process of learning behaviors by watching the actions of others, and the outcomes of those actions.

Instrumental Conditioning

A learning process through which the strength of a behavior is modified by reinforcement or punishment, also known as operant conditioning.

Acquisition

The process of learning or developing a new skill, behavior, or ability.

Contiguity

The condition of being in close association or proximity, often used in psychology to describe the closeness in time or space between two stimuli.