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:

Computations

The process of calculating or determining something by mathematical or logical methods.

Compensation Strategy

A plan adopted by an organization to determine how to compensate its employees, including wages, salaries, benefits, and rewards.

Monetary Benefits

Financial compensation and rewards given to employees, including salaries, bonuses, and other forms of pay for services rendered.

Performance Exceeds

A situation where an individual's or group's work output surpasses the expected standards or objectives.