Question

Tom's basis would equal the amount he paid for his LLC interest plus his share of the LLC debt. Thus, he would have a starting basis of 17,000 + 2,500 of LLC debt, or 19,500. What is Tom's starting basis for his LLC interest?

Answer 1

Tom's starting basis for his LLC interest is the sum of the amount he paid for his LLC interest and his share of the LLC debt, totaling $19,500.

Step-by-step explanation:

Tom's starting basis for his LLC interest is calculated by adding the amount he paid for his interest in the LLC to his share of the LLC's debt. In this case, Tom paid $17,000 for his LLC interest and his share of the LLC debt is $2,500. When we add these two amounts together, we get:

$17,000 (LLC interest) + $2,500 (share of LLC debt) = $19,500

Therefore, Tom's starting basis for his LLC interest would be $19,500.