1065 Ending

[Anthony C]

So other than amending the tax returns, any suggestions.

Partnership has several years of suspended losses due to basis but they were claimed each year due to self preparation. Final year is 2019 and I am hitting a roadblock with finalizing this.

Partners both owe over $100, 000 so if this is not paid back is this a LT Capital Gain?

Thanks you

[Skylane]

 Not sure about LTCG but don’t think so.... 

...extend....amend...  and invoice to clean up their mess.... remind them of all the $$ they saved by screwing it up in the first place.

[Anthony C]

Can I keep picking your brain?

Partners were both on payroll, so there's that and even if amended for that and amended personal for suspended losses, they will still have suspended losses at the conclusion of partnership. They are both not going to return the capital so can the one partner assume the debt, not adding to basis, and pay the debt back to the smllc. Hoping to convert to s Corp for 2020, to avoid the LTCG from suspended loss.

[qbteachmt]

Have you used Web resources:

https://www.irs.gov/businesses/partnerships/form-1065-frequently-asked-questions

https://www.grantthornton.com/library/alerts/tax/2019/Flash/IRS-FAQ-negative-tax-basis-capital-repor...

https://smallbusiness.chron.com/determining-basis-limited-partnership-negative-capital-account-37623...

[Anthony C]

Thank you for this.

I am not sure if it applies to my situation but always good to have some resources.