1065 partner capital basis

[allrryan]

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,

[sjrcpa · Accepted solution]

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?

[allrryan]

Yes, there is recourse debt on one of the partners