3. TP received a proportionate non liquidating distribution from an LLC in which he is a 10% member. His outside basis is $50,000. The distribution consisted of $58,000 in cash and non inventory assets with a basis of $10,000 and a FMV of $12,000. The LLC has no hot assets.I The tax consequences of this distribution are: a. 0 gain or loss and 0 basis in the property. b. 0 gain or loss and $50,000 basis in the property c. $8,000 ordinary income and 0 basis in the property d. $8,000 capital gain and $10,000 basis in the property e. $8,000 capital gain and 0 basis in the property.

3. TP received a proportionate non liquidating distribution from an LLC in which he is a 10% member. His outside basis is $50,000. The distribution consisted of $58,000 in cash and non inventory assets with a basis of $10,000 and a FMV of $12,000. The LLC has no hot assets.I The tax consequences of this distribution are: a. 0 gain or loss and 0 basis in the property. b. 0 gain or loss and $50,000 basis in the property c. $8,000 ordinary income and 0 basis in the property d. $8,000 capital gain and $10,000 basis in the property e. $8,000 capital gain and 0 basis in the property.

CONCEPTS IN FED.TAX.,2020-W/ACCESS

20th Edition

ISBN:9780357110362

Author:Murphy

Publisher:Murphy

Chapter14: Choice Of Business Entity—operations And Distributions

Section: Chapter Questions

Problem 54P

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