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

question 93

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 $9,500. This includes his $2,400 one-fourth share of the LLC's debt. Bob's 704(b) capital account is $16,500. If Tom bought Bob's LLC interest for $16,000, what would Tom's outside basis be in Freedom, LLC?

• A) $9,500
• B) $13,600
• C) $16,000
• D) $18,400

---

Definitions:

John Tyler

The 10th President of the United States, serving from 1841 to 1845, known for his annexation of Texas and adherence to states' rights principles.

Annexed Hawaiian Islands

Describes the historical event in which the Hawaiian Islands were officially incorporated into the United States as a territory in 1898.

Kansas-Nebraska Act

An 1854 U.S. law that created the territories of Kansas and Nebraska, leaving the decision of slavery to the residents, which led to a violent conflict known as "Bleeding Kansas."

Far-Reaching Consequences

Outcomes or effects of an action, decision, or event that have a wide-ranging impact, affecting many areas or people beyond the immediate context.