Tom Is Talking to His Friend Bob, Who Has an Interest

question 115

Multiple Choice

Tom is talking to his friend Bob, who has an interest in Freedom, LLC, about purchasing his LLC interest. Bob's outside basis in Freedom, LLC, is $7,500. This includes his $2,000 one-fourth share of the LLC's debt. Bob's 704(b) capital account is $14,500. If Tom bought Bob's LLC interest for $12,000, what would Tom's outside basis be in Freedom, LLC?

• A)$7,500
• B)$10,000
• C)$12,000
• D)$14,000

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Definitions:

Health Prevention

Strategies or measures taken to prevent the occurrence of disease and promote physical and mental health in individuals or communities.

Healthy Behaviors

Actions or practices by individuals that contribute to maintaining or improving their health.

Balanced Diet

A diet consisting of a variety of different types of food and providing adequate amounts of the nutrients necessary for good health.

Transtheoretical Model

A theory of behavior change that outlines six stages individuals go through in altering behavior, ranging from pre-contemplation to maintenance, and identifies strategies to help progress through these stages.