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

question 105

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 $10,000. This includes his $2,500 one-fourth share of the LLC's debt. Bob's 704(b) capital account is $17,000. If Tom bought Bob's LLC interest for $17,000, what would Tom's outside basis be in Freedom, LLC?

• A)$10,000
• B)$14,500
• C)$17,000
• D)$19,500

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Definitions:

Decision-Making Responsibility

The obligation to make choices that affect an organization's performance and to bear the consequences of those choices.

More Tasks

A directive to undertake additional responsibilities or assignments.

Job Enrichment

The process of making a job more rewarding, challenging, and interesting by adding higher level responsibilities or tasks.

Extrinsic Rewards

Extrinsic Rewards are external incentives given to employees, such as pay raises, bonuses, and recognition, to motivate performance.