Problem 10-50 (LO. 9, 10) This year, Callie and Neil formed CN LLC. Callie contributed $300,000 of cash, and Neil contributed real estate valued at $450,000 (basis of $200,000). The property was subject to a recourse liability of $150,000 that was assumed by the LLC but is not guaranteed by either LLC member. Callie and Neil's profit sharing ratios are 40%/60%, respectively, but the loss sharing ratios are 50%/50%. a. Is the debt treated as a recourse debt or a nonrecourse debt to the LLC members? b. How is the debt allocated between Callie and Neil? Callie $ 375,000 X Neil c. What are Nell's and Callie's bases in the LLC interest immediately after the LLC was formed? Callie Nell Feedback Check My Work Each partner has an outside basis in the partnership interest. That basis is increased/ (decreased) over time for the partner's share of income/(deductions), contributions/ (distributions), and increases/(decreases) in the partner's share of partnership liabilities. The partner's bu is important for determining the treatment of distributions from the partnership to the partner and establishing the deductibility of partnership losses