The BLM LLC's Balance Sheet on August 31 of the Current

question 42

Multiple Choice

The BLM LLC's balance sheet on August 31 of the current year is as follows. The nonrecourse debt is shared equally among the LLC members.On that date,Lillie sells her one-third interest to Robyn for $170,000,including cash and relief of Lillie's share of the nonrecourse debt.Lillie's outside basis for her interest in the LLC is $50,000,including her share of the LLC's debt.How much capital gain and/or ordinary income will Lillie recognize on the sale?

• A)$100,000 capital gain;$50,000 ordinary income.
• B)$120,000 capital gain;$0 ordinary income.
• C)$150,000 capital gain;$0 ordinary income.
• D)$70,000 capital gain;$50,000 ordinary income.
• E)None of the above.

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Definitions:

Sensory Memory

The shortest-term element of memory, which allows the retention of impressions of sensory information after the original stimuli have ended.

Short-term Memory

The power to hold a minimal amount of details in a readily accessible state for a limited period.

Long-term Memory

The aspect of memory in which information is stored for extended periods, ranging from several minutes to a lifetime.

Retroactive Interference

A memory impairment phenomenon where new information interferes with the recall of old information.