Explore BrainMass

Explore BrainMass

    LLC profit and losses - selling interest in LLC

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    Tony had a 40% interest in the Apollo LLC's profits and losses. The balance in his capital account was -$240,000 (negative capital). The LLC's only liability was $1,000,000 nonrecourse mortgage.

    a. What would be the tax consequences to Tony if he sold one-half of his interest in the LLC to Zach for $100?
    b. What would be the tax consequences for Tony if Zach became a partner by making a capital contribution and as a result Tonya's interest in the partnership profit and loss was reduced to 20%?

    © BrainMass Inc. brainmass.com June 4, 2020, 1:23 am ad1c9bdddf
    https://brainmass.com/business/accounting/llc-profit-losses-selling-interest-llc-397639

    Solution Preview

    Please see the below for the complete tutorial

    a. What would be the tax consequences to Tony if he sold one-half of his interest in the LLC to Zach for $100?
    First, half of Tony's interest in the LLC is attributed -$120,000.
    Second, given that this interest is sold ...

    Solution Summary

    The expert examines LLC profit and losses for selling interest in LLC.

    $2.19

    ADVERTISEMENT