If the mortgage is in the owners' names. is the real estate, too?

No, house was bought by the LLC, so asset belongs on Sch L (over $1m). Mortgage is in partners names (married couple). Just don't know how to show the liability?  TY

The LLC doesn't have a mortgage. 

Did the LLC members contribute the money to the Partnership (capital contribution), or did they make a loan to the Partnership (loan from partner)?

Officially neither, this is a new venture for them.  Technically they set up an LLC and the LLC bought the house.  They personally made a down payment, got the mortgage and they are paying the principal/interest payments.  Is all of the liability their capital contribution? TY

Just to confirm, this is a Multi-Member LLC, right?

The clients need to realize that the Multi-Member LLC is a separate entity (which is largely the purpose of an LLC).  Do they expect the LLC to repay them, or are the contributing to the LLC as business owners?

Yes two members, husband and wife (50/50), filing a late initial 1065 for 2021.  No income in 2021, just interest payments, property tax, insurance and the asset/house itself. They will have made profit in 2022.  

So the mortgage should be a capital contribution not a liability?

That is not for you to decide.  You need to ASK the clients about what they intended.

"No income in 2021"

Why not? Was the property available for rent, or being fixed?

Only bought in October. More of a summer rental destination