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E
erubicz
Level 2
May 6, 2024
Question

Partnership change in ownership

  • May 6, 2024
  • 1 reply
  • 2 views

I am working on a partnership return and there was a change in ownership in 2023. The partner that left has a negative capital account. Does that amount need to be distributed amongst the remaining partners? Or how do I zero out the account while maintaining tha correct balance sheet? Thank you

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    1 reply

    George4Tacks
    George4Tacks
    Level 15
    May 8, 2024
    @erubicz wrote:

    I am working on a partnership return and there was a change in ownership in 2023. The partner that left has a negative capital account. Does that amount need to be distributed amongst the remaining partners? YES Or how do I zero out the account while maintaining thae correct balance sheet? Thank you

     Everyone may have an outside basis. Did the leaving partner contribute any money? OR did they just walk out the door owing money to the partnership. 

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