Partnership Capital

[NorthStarN15]

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! 

[George4Tacks]

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. 

[NorthStarN15]

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

[sjrcpa]

I do it as Other Reductions and Other Increases.

[George4Tacks]

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.

[NorthStarN15]

That is true. Thank you for your help! 

[NorthStarN15]

Thank you.