Tax basis of member in LLC recourse debt

[ZukaAdam]

Hey all -- two-member LLC (LLC A) with long-term recourse debt (promissory note).  The two members of the LLC (LLC's B and C) are also LLC's, each of which has two individual members.

 

Does recourse debt of LLC A add to tax basis of LLC B and LLC C as members of LLC A?  Does the fact that LLC's B and C have both elected to be treated as S corps for tax purposes negate any possible tax basis these two LLC's may have in the recourse debt owed by LLC A?

 

Appreciate your insight and expertise.

-Adam-

[DANRVAN]

I do not see any reason why the S corp partners would be treated differently than any other partner in regards to basis.

The rules for tiered partnerships do not apply here since the lower tier partners are Sub S.