Suzy Owns a 30% Interest in the JSD LLC

question 104

Multiple Choice

Suzy owns a 30% interest in the JSD LLC. In liquidation of the entity, Suzy receives a proportionate distribution of $30,000 cash, inventory (basis of $16,000, fair market value of $18,000) , and land (basis of $25,000, fair market value of $30,000) . Suzy's basis in the entity immediately before the distribution was $80,000. As a result of the distribution, what is Suzy's basis in the inventory and land, and how much gain or loss does she recognize?

• A) $0 basis in inventory; $25,000 basis in land; $0 gain or loss.
• B) $16,000 basis in inventory; $34,000 basis in land; $0 gain or loss.
• C) $16,000 basis in inventory; $25,000 basis in land; $9,000 loss.
• D) $18,000 basis in inventory; $32,000 basis in land; $0 gain or loss.
• E) $16,000 basis in inventory; $25,000 basis in land; $39,000 loss..

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Definitions:

Regression Model

A statistical technique that models and investigates the relationships between dependent and independent variables.

Real Estate

Property consisting of land and the buildings on it, along with its natural resources, such as crops, minerals, or water.

Variability

The extent to which data points in a statistical distribution or dataset differ from each other.

Real Estate

Real estate refers to property consisting of land and the buildings on it, along with its natural resources, and is subject to transactions like buying, selling, or renting.