Styling Shoes, LLC Filed Its 20X8 Form 1065 on March

question 76

Multiple Choice

Styling Shoes, LLC filed its 20X8 Form 1065 on March 15, 20X9. Styling had three members with the following ownership interests and tax basis at the beginning of the 20X8:
(1) Jane, a member with a 25% profits and capital interest and a $5,000 outside basis, (2) Joe, a member with a 45% profits and capital interest and a $10,000 outside basis, and (3) Jack, a member with a 30% profits and capital interest and a $2,000 outside basis. The following items were reported on Styling's Schedule K for the year: ordinary income of $100,000, Section 1231 gain of $15,000, charitable contributions of $25,000, and tax-exempt income of $3,000. In addition, Styling received an additional bank loan of $12,000 during 20X8. What is Jane's tax basis after adjustment for her share of these items?

• A) $28,250.
• B) $31,250.
• C) $33,500.
• D) $57,250.

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Definitions:

Bowman Capsule

A cup-like sac at the beginning of the tubular component of a nephron in the kidney that performs the first step in the filtration of blood to form urine.

Loop of Henle

A segment of the nephron in the kidney crucial for concentrating urine and conserving water.

Afferent Arteriole

The small artery that carries blood toward the capillaries in the glomerulus of the kidney.

Glomerulus

A network of capillaries located in the beginning of a nephron in the kidney where blood filtration takes place.