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Partnership Capital

NorthStarN15
Level 2

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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6 Comments 6
George4Tacks
Level 15

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. 


Here's wishing you many Happy Returns
NorthStarN15
Level 2

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

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sjrcpa
Level 15

I do it as Other Reductions and Other Increases.


Ex-AllStar
George4Tacks
Level 15

Regardless of the entries in the Partnership to balance out the capital accounts the $25,000 was a transaction between the two INDIVIDUALS and does not affect the PARTNESHIP in any way.


Here's wishing you many Happy Returns
NorthStarN15
Level 2

That is true. Thank you for your help! 

NorthStarN15
Level 2

Thank you.