jeffmcpa2010
Level 11
02-19-2022
09:47 AM
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If they both have income or both have loss regardless of the interest allocation, do what makes sense to you. Then just be consistent from year to year.
If one has loss and one has gain, you want to be sure an outsider would think your method is reasonable, so that you can defend yourself if ever challenged that you are making decisions to better avoid passive loss rules at the partner level.