Hayden and Hedvig share equally in the profits, losses, and capital of the accru

Question

Hayden and Hedvig share equally in the profits, losses, and capital of the accrual basis HH LLC. Hayden is the managing member of the LLC (treated as a general partner) and is a U.S. citizen. At the beginning of the current tax year, Hayden's capital account has a balance of $1,420,000, and the LLC has recourse debts of $412,000 payable to unrelated parties. All partnership recourse debt is shared equally between the partners. The following information about HH's operations for the current year is obtained from the entity's records: Ordinary income $2.800,000 Interest income from P&G bond 122,000 Long-term capital loss 56,000 Short-term capital gain 110,000 Charitable contribution 36,800 Cash distribution to Hayden 209,000 Year-end LLC debt payable to unrelated parties is $376,000. If all transactions are reflected in his beginning capital and basis in the same manner:

a. Hayden's basis in the LLC interest at the beginning of the year is $.

b. Hayden's basis in the LLC interest at the end of the current year is $

Ordinary income $2.800,000 Interest income from P&G bond 122,000 Long-term capital loss 56,000 Short-term capital gain 110,000 Charitable contribution 36,800 Cash distribution to Hayden 209,000

Explanation / Answer

(a) Hayden's basis in the LLC interest at the beginning of the year is Amount in $ Capital Account Balance at the Beginning of the year        14,20,000 Share of Debt   1/2*412,000           2,06,000 haydens basis at the Beginning of the year        16,26,000 (b) Hayden's basis in the LLC interest at the end of the current year is Amount in $ Amount in $ Capital Account Balance at the Beginning of the year        14,20,000 Add: hayden share Ordinary Income        28,00,000 Interest Income           1,22,000        29,22,000 STCG           1,10,000        44,52,000 Less: LTCg             -56,000 charitable contributions             -36,800 Cash Distribution to Hayden         -2,09,000        41,50,200 Sahre of hadens debt ($376000*1/2)           1,88,000 haydens Basis at the end of the year        43,38,200

Related Questions

Navigate

• Browse (All)
• Browse H
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.