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NorthStarN15
Level 2
February 18, 2024
Question

Partnership Capital

  • February 18, 2024
  • 1 reply
  • 10 views

One partner was bought out by a new partner so I need to transfer his ending capital to the new partner and he should have zero as the ending capital. Every time I try to do so in ProConnect under the special allocation section it does not show up on the schedule k-1. I would like to know what are the proper steps to get this done ASAP. Thank you! 

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    1 reply

    George4Tacks
    George4Tacks
    Level 15
    February 18, 2024

    Show a distribution of the ending capital to the departing partner.

    Add that amount as a contribution to the entering partner.

    Both will like have an outside basis to contend with on their personal returns. 

    Answers are easy. Questions are hard!
      N
      NorthStarN15Author
      Level 2
      February 18, 2024

      Thank you. The departing partner did not receive that money though. He sold his interest for cash of $25,000. Would that change anything? 

      sjrcpa
      sjrcpa
      Level 15
      February 18, 2024

      I do it as Other Reductions and Other Increases.

      The more I know the more I don’t know.
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