Frank and Bob Are Equal Members in Soxy Socks, LLC

question 20

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

---

Definitions:

Sovereign States

Independent and self-governing political entities recognized by international law, possessing complete authority over their territory and governing institutions.

Congress

America's law-making entity, comprising two branches: the Senate and the House of Representatives.

Growth Of Democracy

The process through which democratic forms of governance expand and deepen, involving increased participation of citizens in political processes.

Corrupt Bargain

A term used to describe the alleged deal between John Quincy Adams and Henry Clay that secured Adams' presidency in exchange for Clay becoming Secretary of State, following the contested presidential election of 1824.