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:

Lactate Fermentation

An anaerobic metabolic process by which glucose or other six-carbon sugars are converted into cellular energy and the metabolite lactate.

Aerobic Respiration

A biochemical reaction where cells transform glucose and oxygen into energy, alongside producing carbon dioxide and water.

ATP

Adenosine triphosphate, a molecule that stores and transfers energy within cells, essential for metabolic processes.

Aerobic Respiration

A process in which cells convert glucose and oxygen into energy, carbon dioxide, and water, occurring in the mitochondria.