Styling Shoes, LLC Filed Its 20X8 Form 1065 on March

question 38

Multiple Choice

Styling Shoes, LLC filed its 20X8 Form 1065 on March 15, 20X9. Styling had three members with the following ownership interests and tax basis at the beginning of the20X8: (1) Jane, a member with a 25% profits and capital interest and a $5,000 outside basis, (2) Joe, a member with a 45% profits and capital interest and a $10,000 outside basis, and (3) Jack, a member with a 30% profits and capital interest and a $2,000 outside basis. The following items were reported on Styling's Schedule K for the year: ordinary income of $100,000, Section 1231 gain of $15,000, charitable contributions of$25,000, and tax-exempt income of $3,000. In addition, Styling received an additional bank loan of $12,000 during 20X8. What is Jane's tax basis after adjustment for her share of these items?

• A) $33,500.
• B) $57,250.
• C) $31,250.
• D) $28,250.

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Definitions:

Epiphysis

The expanded end of a long bone.

Medullary Cavity

The central cavity of bone shafts where red and yellow bone marrow is stored.

Diaphysis

The shaft or central part of a long bone.

Endosteum

The thin vascular membrane of connective tissue that lines the inner surface of bony tissue, involved in bone growth and healing.