In X1, Adam and Jason Formed ABC, LLC, a Car

question 80

Multiple Choice

In X1, Adam and Jason formed ABC, LLC, a car dealership in Kansas City. In X2, Adam and Jason realized they needed an advertising expert to assist in their business. Thus, the two members offered Cory, a marketing expert, a 1/3 capital interest in their partnership for contributing his expert services. Cory agreed to this arrangement and received his capital interest in X2. If the value of the LLC's capital equals $180,000 when Cory receives his 1/3 capital interest, which of the following tax consequences does not occur in X2?

• A) Cory reports $60,000 of ordinary income in X2.
• B) Adam, Jason and Cory receive an ordinary deduction of $20,000 in X2.
• C) Adam and Jason receive an ordinary deduction of $30,000 in X2.
• D) Cory reports $60,000 of ordinary income in X2, and Adam and Jason receive an ordinary deduction of $30,000 in X2.

---

Definitions:

Negative Information

Data or facts that reflect unfavorably upon an individual, organization, product, or service, potentially impacting perceptions and decisions.

Telepresence

Technology-enabled feeling of presence, allowing people to feel or appear as if they are present in a location different from their physical one.

Video Conferencing

A technology that allows people in different locations to conduct face-to-face meetings without the need to travel.

Web Cameras

Electronic devices designed to capture and stream video content in real-time over the internet or for video calls.