In X1, Adam and Jason Formed ABC, LLC, a Car

question 54

Multiple Choice

In X1, Adam and Jason formed ABC, LLC, a car dealership in Kansas City. In X2, Adam and Jason realized they needed an advertising expert to assist in their business. Thus, the two members offered Cory, a marketing expert, a one-third capital interest in their partnership for contributing his expert services. Cory agreed to this arrangement and received his capital interest in X2. If the value of the LLC's capital equals $180,000 when Cory receives his one-third capital interest, which of the following tax consequences does not occur in X2?

• A)Cory reports $60,000 of ordinary income in X2.
• B)Adam, Jason, and Cory receive an ordinary deduction of $20,000 in X2.
• C)Adam and Jason receive an ordinary deduction of $30,000 in X2.
• D)Cory reports $60,000 of ordinary income in X2, and Adam and Jason receive an ordinary deduction of $30,000 in X2.

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Definitions:

Speciesism

The assumption of human superiority leading to the exploitation of animals, based on the belief that all and only human beings have intrinsic value.

Animal Experiments

The use of non-human animals in research to study biology, psychology, disease treatments, and medications, often with the aim of applying findings to human health.

Peter Singer

A prominent ethical philosopher known for his work on animal rights, effective altruism, and utilitarianism, advocating that ethical decisions should be based on the principle of equal consideration of interests.

Roman Catholicism

A major branch of Christianity led by the Pope, characterized by its traditions, sacramental practices, and adherence to the teachings of the Church.