In a Proportionate Current (Nonliquidating) Distribution of His 30% Interest

question 35

Essay

In a proportionate current (nonliquidating) distribution of his 30% interest in the MNO LLC, Neil received cash ($60,000), land (basis of $40,000 and value of $75,000), and unrealized receivables (basis of $0 and value of $22,000). In addition, Neil is relieved of his $40,000 share of the LLC's liabilities. Neil's basis in MNO (including his share of LLC liabilities) was $80,000 immediately prior to this distribution.
a. How much gain or loss does Neil recognize on this distribution?
b. What is Neil's basis in the receivables and land he receives in the distribution?
c. What is Neil's basis in the LLC interest following the distribution?

Identify strategies to minimize taxes owed, including the timing of income receipt and deductions.

Recognize the characteristics and benefits of different savings and retirement plans.

Know the annual audit percentage for tax filers and implications.

Comprehend the tax implications of excise taxes on specific goods and services.

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Definitions:

Seminal Studies

Seminal Studies are groundbreaking research works that significantly influence and shape the direction of future studies and developments within a particular field.

Social Psychology

Studies how individuals' thoughts, feelings, and behaviors are influenced by the actual, imagined, or implied presence of others.

Adaptive Behavior

Actions or skills that allow an individual to adjust to changes in their environment and effectively meet demands and challenges.

Social Behavior

Actions or reactions of individuals or groups in social situations, influenced by the presence and behavior of others.