Laurel contributed equipment worth $215,000, purchased 8 months ago for $240,000 cash and used in...
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Laurel contributed equipment worth $215,000, purchased 8 months ago for $240,000 cash and used in her sole proprietorship, to Sand Creek LLC in exchange for a 20 percent profits and capital interest in the LLC. Laurel agreed to guarantee all $14,400 of Sand Creeks accounts payable, but she did not guarantee any portion of the $107,500 nonrecourse mortgage securing Sand Creeks office building. Other than the accounts payable and mortgage, Sand Creek does not owe any debts to other creditors.
a. What is Laurels initial tax basis in her LLC interest?
b. Laurels holding period begins the day the LLC interest is acquired. True or False
c. What is Sand Creeks initial basis in the contributed property?
d. What is Sand Creeks holding period in the contributed property?
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