Skip to main content
Level 2
March 2, 2023
Solved

1065 partner capital basis

  • March 2, 2023
  • 1 reply
  • 11 views

Hello,

I'm preparing a 1065 for a 2 partner general partnership.  This is their second year in business and last year was a loss.  All funding since initial capital is in the form of loans.  So, their beginning capital basis is negative.  Where would I input a negative beginning basis since the form won't let me enter anything lower than 0.

Thanks,

This topic has been closed for replies.
Best answer by sjrcpa

Capital account can be negative. Basis can only go to zero.

But, is there recourse debt that would give them basis at the beginning of the year?

1 reply

sjrcpa
sjrcpaAnswer
Level 15
March 2, 2023

Capital account can be negative. Basis can only go to zero.

But, is there recourse debt that would give them basis at the beginning of the year?

The more I know the more I don’t know.
allrryanAuthor
Level 2
March 3, 2023

Yes, there is recourse debt on one of the partners