How do I adjust the member equity accounts to reflect the at risk recourse loan they all guarantee? I need to increase the equity account since the owners guarantee a loan.
The loan does not also increase equity if you go something for it. For example, if there is money, then the Deposit is "from" the loan, and the bank increases, not Equity.
Thank you. But I dont think I am being clear. I have the loan on my balance sheet as a liability. I was told I can increase the equity accounts for the owners by the amount they are guaranting the loan for since the loan is recourse and this creates an at risk contribution by the owners.
It's a tax entry not a book entry. Loans guaranteed by members increases basis in an LLC or LLP.
Marc
What are you to offset the increase in Equity against? If you already got an asset for the loan, you can't also increase Equity. The Equity in total has not changed.
At Risk is a reported tax form value. Perhaps you are supposed to split some of the current equity into an At Risk portion?
Why not ask for clarification from whoever you are currently working with?
Thanks, CopperCanyon. That was the only At Risk entry I am familiar with, too.
