Question #10. XYZ, LLC, is treated as a partnership for income tax purposes. The LLC has three equal members (i.e., they share in profits and losses 1/3 each). Member X has an outside basis of $1,033. The LLCs balance sheet shows cash of $3,100, nonrecourse liabilities that total $900, and partner capital of $2,200. The LLC has no other assets or liabilities. The LLC uses $300 of cash to pay down the liabilities from $900 to $600. What impact does the reduction in the LLCs liabilities have on Member Xs outside basis? What is Member Xs outside basis afterwards?

Please show your calculation