formed. The bank required Katherine, Bethany, and Charlie to personally guarantee the bank loan. The terms were structured so the members would each be responsible for a portion of the debt equal to the percentage of BKC Manufacturing losses allocated to each member (one-third each) and would have no right of reimbursement from either BKC Manufacturing or the other members of BKC Manufacturing. a) How much of the $45,000 bank debt was allocated to each member? b) What if the $45,000 bank loan is BKC Manufacturing's only debt, what is Bethany's initial basis in her BKC Manufacturing interest after taking her share of BKC Manufacturing's bank debt into account?
What if Bethany and Charlie initially each contributed $100,000 and BKC Manufacturing borrowed $45,000 from a bank when BKC Manufacturing was formed. The bank required Katherine, Bethany, and Charlie to personally guarantee the bank loan. The terms were structured so the members would each be responsible for a portion of the debt equal to the percentage of BKC Manufacturing losses allocated to each member (one-third each) and would have no right of reimbursement from either BKC Manufacturing or the other members of BKC Manufacturing.
a) How much of the $45,000 bank debt was allocated to each member?
b) What if the $45,000 bank loan is BKC Manufacturing's only debt, what is Bethany's initial basis in her BKC Manufacturing interest after taking her share of BKC Manufacturing's bank debt into account?
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