Debt Basis

Members are allowed to treat company debt as basis in some cases. This allows a member to deduct losses in excess of their tax basis. A member is allocated any LLC debt for which they bear an economic risk of loss, plus their share of any debt for which none of the other members specifically bear an economic risk of loss. However, these rules are technical and we suggest you contact us for specifics related to your situation. Please keep copies of all loan documentation, especially guarantees, so that members' basis can be accurately calculated.