If you loan funds, it did not also increase basis, because it is either loaned or paid in. It cannot fall into both categories.

You seem to be describing that a married couple has invested in their own LLC by treating it as a Loan from only one of the people? In other words, they put themselves in debt to one of themselves? And there is going to be interest paid, so that is debt out and interest income, running their own money in circles?

Where are these people getting their professional guidance from? Sheesh.