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(Solved) (Latest ver. Aug 2020) - LLC profit and losses - selling interest in LLC

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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%?


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This question was answered on: Sep 16, 2020

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