Can you show me an example that will help me understand capital
accounts for a real estate LLC?  I am helping someone who is a partner
in an LLC that is developing some real estate.  There are three
general partners with 51% (Partner A), 39% (Partner B) and 10%
(Partner C) ownership.  The 39% partner came in late and bought out
39% from the partner that is now 10%.  Let's call the price for that
purchase $250,000.  I don't know how much the original two partners (A
and C) put in to start the LLC.  Since B joined, there have been five
cash calls of roughly $10,000 each for Partner B.  The other partners,
I believe, put in their appropriate share.

My understanding is that there are two relevant capital accounts for
an LLC:  the book capital account and the tax capital account.  The
tax capital account is tracked for the LLC on the 1065 form and
individually for each partner on their K-1.  The book capital account,
I believe, is simply a reflection of capital invested and
distributions made for each partner.  Book capital, I believe, should
foot with part of the owner's equity section of the financial books of
the LLC.  (There have been and will not be any investments or
distributions of non-cash property.)

The partners have an operating agreement which defines the tracking of
capital accounts, but I can't figure out if they are trying to track
book or tax capital.  They count initial capital contributed, but then
also count net profits and "expenditures described in Section
705(a)(2)(B)" as well as "income described in Section 705(A)(1)(b) of
the Code" and "the fair market value of property distributed to such
Member by the Company (net of liabilities secured by such distributed
property that such Member is considered to assume or take subject to
Section 752 of the Code)"

Can you help further clarify my understanding of capital accounts,
preferably with an example that includes numbers, so that I can help
my friend set up systems for tracking their capital accounts?