Question

Hamby transfers a capital asset in exchange for a one-half interest in Hartsville LLC. The asset has an adjusted basis to Hamby of $20,000 and a fair market value of $55,000.

Hamby has a $_____________ realized gain on the exchange. Hamby's basis for his LLC interest is $______. The LLC's holding period for the capital asset carries over from Hamby . The LLC’s basis for the contributed property is $____________.

Answer 1

Answer: a. $35000

b. $20000

c. $20000

Step-by-step explanation:

a. The realized gain will be:

= Fair market value - Adjusted basis

= $55000 - $20000

= $35000

b. The basis for LLC Interest will be will be thesame as the adjusted basis which will be $20000

c. The LLC basis for the contributed property will be $20000 as it's the cost of the adjusted basis .

=