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

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Definitions:

Adrenal Hormones

Hormones that are produced by the adrenal glands and that are involved in emotion and stress.

Biological Rhythms

Natural cycles of change in bodily functions or activities, such as the sleep-wake cycle or hormonal cycles.

Blood Sugar

The concentration of glucose in the blood, an important energy source for the body's cells and a key indicator of metabolic health.

Glutamate

A major excitatory neurotransmitter in the brain, involved in memory and learning.