Discussion:Partnership: Negative capital account.
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Discussion Forum Index --> Tax Questions --> Partnership: Negative capital account.
| 1 August 2006 | |
| I have a 50/50 partnership that is dissolving. One partner has a small capital balance and the other has a small negative capital balance of an equal amount. As they have split all remaining cash equally between them, they are asking if I can just allocate the additional amount to one of the partners on their final K-1. Is that allowed under the Uniform Partnership Act? Is that equitable, not taking into account after tax benefit? What is done in practice? | |
| 1 August 2006 | |
| So long as the amounts are less than the annual gift exclusion, I let the partners do what they want. | |
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