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

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Definitions:

Obsessive-Compulsive Disorder (OCD)

A mental disorder where individuals experience repetitive, unwanted thoughts (obsessions) and behaviors (compulsions) they feel compelled to perform.

DSM-5

The Diagnostic and Statistical Manual of Mental Disorders, Fifth Edition, a classification and diagnostic tool for mental disorders used by mental health professionals.

Anxious Disorder

A category of mental health disorders characterized by excessive fear, anxiety, and related behavioral disturbances.

Obsessive-Compulsive Disorder (OCD)

A mental health disorder characterized by repetitive, unwanted thoughts (obsessions) and irrational, excessive urges to do certain actions (compulsions).