​Brad Is a 40% Member in the BB LLC

question 87

Multiple Choice

​Brad is a 40% member in the BB LLC.At the beginning of the tax year,Brad's capital account showed a balance of $120,000.In this case,his capital account equals his basis in the LLC interest excluding his share of the LLC's debts.His Schedule K-1 showed recourse debt (guaranteed by Brad) and nonrecourse debt of $10,000 and $20,000,respectively.During the current year,BB reported net ordinary income of $200,000 and non-deductible expenses of $2,000.There were no distributions during the year.At the end of the year,Brad's share of recourse (guaranteed) and nonrecourse liabilities were $20,000 and $30,000,respectively.How much is Brad's basis in the LLC interest at the end of the year?
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• A)​$199,200.
• B)​$200,000.
• C)​$220,000.
• D)​$249,200.
• E)​$250,000.

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Definitions:

Value Creation

is the process through which businesses generate value for customers, shareholders, and society, often leading to competitive advantage.

Product Specification Stage

The phase in product development where detailed descriptions of a product's attributes, features, and performance criteria are defined.

B2B Buying Process

A series of steps that businesses follow when making a purchase from another business, including need recognition, product specification, vendor evaluation, and purchase decision.

Gatekeeper

The buying center participant who controls information or access to decision makers and influencers.