Greg & Haley form the Nashua LLC with equal ownership. Greg contributes $80,000

Question

Greg & Haley form the Nashua LLC with equal ownership. Greg contributes $80,000 cash and Haley contributes land with an adjusted basis of $90,000 and a fair market value of $80,000.

a. How much gain or loss, if any, does Haley realize on the transfer? Does Haley recognize any gain or loss?

b. What is Greg's basis in his LLC interest?

c. What is Haley's basis in her LLC interest?

d. What is the LLCs basis in the property transferred by Haley?

e. Would there be a more effective way to structure the partnerhip formation?

Explanation / Answer

Greg & Haley form the Nashua LLC with equal ownership. Greg contributes $80,000

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