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Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Totals Liabilities and capital: Nonrecourse liabilities Tatsuki Robert* Totals Totals Assets: Cash Investments Land Totals Capital: Nonrecourse Debt Capital-Tatsuki Capital-Robert Capital-Dave "Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Cirque, LLC Balance Sheet Tax Basis c. Prepare a balance sheet for Cirque Capital immediately after Dave's admission showing the members' tax capital accounts and capital accounts stated at fair market value. $ S 0 $ Basis $ 180,000 130,000 230,000 $ 540,000 S $ 210,000 165,000 165,000 $ 540,000 704(b)/FMV Fair Market Value $ 180,000 157,000 420,000 $ 757,000 $ 210,000 273,500 273,500 $ 757,000

Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Totals Liabilities and capital: Nonrecourse liabilities Tatsuki Robert* Totals Totals Assets: Cash Investments Land Totals Capital: Nonrecourse Debt Capital-Tatsuki Capital-Robert Capital-Dave "Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Cirque, LLC Balance Sheet Tax Basis c. Prepare a balance sheet for Cirque Capital immediately after Dave's admission showing the members' tax capital accounts and capital accounts stated at fair market value. $ S 0 $ Basis $ 180,000 130,000 230,000 $ 540,000 S $ 210,000 165,000 165,000 $ 540,000 704(b)/FMV Fair Market Value $ 180,000 157,000 420,000 $ 757,000 $ 210,000 273,500 273,500 $ 757,000

SWFT Essntl Tax Individ/Bus Entities 2020
SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter6: Losses And Loss Limitations
Section: Chapter Questions
Problem 18P
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Required Information [The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Totals Liabilities and capital: Nonrecourse liabilities Tatsuki* Robert* Totals Assets: Cash Investments Land Totals Capital: Nonrecourse Debt Capital-Tatsuki Capital-Robert Capital-Dave Totals *Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Cirque, LLC Balance Sheet Tax Basis c. Prepare a balance sheet for Cirque Capital immediately after Dave's admission showing the members' tax capital accounts and their capital accounts stated at fair market value. $ $ 0 $ 0 $ $ 180,000 130,000 230,000 $540,000 704(b)/FMV Basis $ 210,000 165,000 165,000 $ 540,000 0 Fair Market Value 0 $ 180,000 157,000 420,000 $ 757,000 $ 210,000 273,500 273,500 $ 757,000
Transcribed Image Text:Required Information [The following information applies to the questions displayed below.] Dave LaCroix recently received a 10 percent capital and profits interest in Cirque Capital LLC in exchange for consulting services he provided. If Cirque Capital had paid an outsider to provide the advice, it would have deducted the payment as compensation expense. Cirque Capital's balance sheet on the day Dave received his capital interest appears below: Assets: Cash Investments Land Totals Liabilities and capital: Nonrecourse liabilities Tatsuki* Robert* Totals Assets: Cash Investments Land Totals Capital: Nonrecourse Debt Capital-Tatsuki Capital-Robert Capital-Dave Totals *Assume that Tatsuki's basis and Robert's basis in their LLC interests equal their tax basis capital accounts plus their respective shares of nonrecourse liabilities. Note: Leave no answer blank. Enter zero if applicable. Cirque, LLC Balance Sheet Tax Basis c. Prepare a balance sheet for Cirque Capital immediately after Dave's admission showing the members' tax capital accounts and their capital accounts stated at fair market value. $ $ 0 $ 0 $ $ 180,000 130,000 230,000 $540,000 704(b)/FMV Basis $ 210,000 165,000 165,000 $ 540,000 0 Fair Market Value 0 $ 180,000 157,000 420,000 $ 757,000 $ 210,000 273,500 273,500 $ 757,000
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