Net liquidating equity
The LLC has enough cash to make one or a series of liquidation payments to J for the full value of his interest. If the LLC distributes 0,000 cash to J, he will recognize a capital loss of 0,000.
J has no current or planned capital gains, so his ability to use the 0,000 loss will be Suppose, instead, that BC distributes to J 0,000 cash and one of the small office buildings that has a FMV of 0,000 and a tax basis to BC of 0,000.
1231 loss of 0,000, which will be ordinary, assuming he has no other Sec.
704(c)(1)(C) property) in liquidation of its interest in the LLC, the LLC's adjusted basis in the distributed property immediately before the distribution includes the Sec. 704(c)(1)(C) basis adjustment for the property in which the member relinquished an interest, if any, by reason of the liquidation. 704(c)(1)(C) basis adjustment reallocation are netted, and the net amount is allocated under Regs. 734(b) adjustment that would arise from the Depreciation Methods Available After Liquidating Distribution A member who receives a liquidating distribution of depreciable property acquires a depreciable basis in the property.
To the extent the transferee member's basis does not exceed the LLC's predistribution basis, the member assumes the LLC's role and continues to depreciate the property using the remaining life and method used by the LLC (Sec. If the member's basis exceeds the LLC's predistribution basis, the excess is treated as newly acquired property that is placed in service by the distributee at the time of distribution.
704(c)(1)(B)); (3) the distribution is within seven years after a contribution of appreciated property (see Sec. He has never contributed property other than cash to the LLC.
737); or (4) the distribution is part of a disguised sale (see Sec. A loss may be recognized upon a distribution in liquidation of a member's interest if no property other than cash, unrealized receivables, and inventory is received. Nontaxable liquidating distribution of cash and property: Z LLC is liquidating. To liquidate his interest, Z distributes to R ,000 cash plus real property with a ,000 FMV.
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Converting capital loss on a liquidating distribution to ordinary loss: J, A, and B are equal members in BC LLC, which owns several small commercial buildings in White Fish, Mont.