Suzy Owns a 30% Interest in the JSD LLC

question 104

Multiple Choice

Suzy owns a 30% interest in the JSD LLC. In liquidation of the entity, Suzy receives a proportionate distribution of $30,000 cash, inventory (basis of $16,000, fair market value of $18,000) , and land (basis of $25,000, fair market value of $30,000) . Suzy's basis in the entity immediately before the distribution was $80,000. As a result of the distribution, what is Suzy's basis in the inventory and land, and how much gain or loss does she recognize?

• A) $0 basis in inventory; $25,000 basis in land; $0 gain or loss.
• B) $16,000 basis in inventory; $34,000 basis in land; $0 gain or loss.
• C) $16,000 basis in inventory; $25,000 basis in land; $9,000 loss.
• D) $18,000 basis in inventory; $32,000 basis in land; $0 gain or loss.
• E) $16,000 basis in inventory; $25,000 basis in land; $39,000 loss..

---

Definitions:

Frequency Theory

A theory in the study of hearing that suggests pitch is determined by the rate at which nerve impulses are fired in response to sound vibrations.

High Pitches

Sounds that have a high frequency, typically perceived as shrill or squeaky, easily distinguishable from lower pitch sounds.

Low-Frequency

Low-frequency pertains to events, signals, or items occurring or operating at a relatively small number of cycles or occurrences per unit of time.

High-Frequency

Refers to phenomena or activities that occur at a rapid rate or over short intervals, often used in contexts like electronics, trading, or signals where a high number of cycles or transactions happen within a short period.