allrryan
Level 1

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,

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sjrcpa
Level 15

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.

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allrryan
Level 1

Yes, there is recourse debt on one of the partners

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