Belinda owns a 30% profit and loss interest in the BOW LLC, and her basis in the interest is $30,000 excluding her share of the LLC's liabilities. Belinda guarantees a $40,000 LLC debt. Remaining liabilities (not guaranteed by any of the LLC members) are $100,000. Belinda's basis in the LLC is $100,000.

Question

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Belinda's basis in the LLC is increased by her share of the LLC's liabilities, which is $30,000 (30% of $100,000). Her basis is also increased by the amount of the LLC debt she guarantees, which is $40,000. Therefore, her total basis in the LLC is $100,000 ($30,000 + $40,000 + $30,000).

Belinda Owns a 30% Profit and Loss Interest in the BOW