partnership help, please

[oceanlovin'ea]

New partnership started in September of last year.

Each partner contributed $150 to start business = $300 total

Partnership had a loss of $600 for the year. So each partners share of the loss is $300. But if I am reading the book correctly. They can only take $150 of the loss because that is all the basis they have in the partnership. Is that correct?

They are general partners both working this business. So they should be able to take losses. Right?

Second issue - partner B took an advance of $623 out of the business at the end of the year. Guess he was broke. Partner A did not take anything. This was not guaranteed payment or a distribution in the true sense of the word. What do I do with that piece of information?

Thanks for your help.

I have to finish this by Saturday because Partner A is going out of the country on Sunday on a temporary volunteer assignment.

Linda

[veritas]

it would seem

there must be some liabilities at year end?

[Lion]

Partnership

I agree, either there are liabilities that they share in their agreed to percentage or they put more money in, loaned money to, the partnership. Unless all those checks bounced, the money came from somewhere. And, the distribution was a distribution; that partner might have gain in excess of his basis.

[oceanlovin'ea]

I'll find out

Ok. thanks for making me think about that. I sent him an email to find out if they still owed on somethings at the end of the year. There was one particularly large expense.

I'll be back.

Linda