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    #1

    Partnership Debt Basis

    All numbers have been changed to protect the guilty:

    LLC taxed as Partnership formed in 2008. Partner A puts in $20,000 cash and personally guarantees a note in the LLC's name in the amount of $150,000. LLC passes through loss in 2008 to Partner A of $50,000. Partner A deducts full $50,000 loss (uses $20,000 cash contribution basis and $30,000 of debt basis). Up to this point I'm ok. Now, for 2009 LLC passes through another loss of $50,000 to Partner A. I was thinking that Partner A can again fully deduct $50,000 loss by using $50,000 of remaining debt basis. This is right, right? For some reason the basis worksheet in Drake and TTB are screwing me up.
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    #2
    Originally posted by JoshinNC View Post
    All numbers have been changed to protect the guilty:

    LLC taxed as Partnership formed in 2008. Partner A puts in $20,000 cash and personally guarantees a note in the LLC's name in the amount of $150,000. LLC passes through loss in 2008 to Partner A of $50,000. Partner A deducts full $50,000 loss (uses $20,000 cash contribution basis and $30,000 of debt basis). Up to this point I'm ok. Now, for 2009 LLC passes through another loss of $50,000 to Partner A. I was thinking that Partner A can again fully deduct $50,000 loss by using $50,000 of remaining debt basis. This is right, right? For some reason the basis worksheet in Drake and TTB are screwing me up.
    Josh, it sounds right to me. Just in case, you did set up the loan basis on the basis worksheet? What exactly is drake doing that does not look right?
    This post is for discussion purposes only and should be verified with other sources before actual use.

    Many times I post additional info on the post, Click on "message board" for updated content.

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      #3
      on the basis worksheet

      you first enter on 4a the Partner's Share of the Partnership Liabilities. Then, on 4b you enter the Partner's Share from the Prior Year. The system subtracts 4b from 4a and I end up with a basis of 0. Maybe I'm entering everything on the worksheet wrong. I didn't prepare the 2008 return, so it didn't just carryover from '08 in the software. If the Partnership didn't take out any new debt wouldn't 4a and 4b be the same number? That's where I'm confused (I think).

      The TTB worksheet seems to do the same thing (lines 7 & 8, pg 24-6).

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        #4
        I would recheck what figures you are using and check last years figures. 4a should be 150,000 and 4b should be 30,000.... Is the way I see it, with a capital account Zero. Or, if worksheet is combined, 170,000 and 50,000
        Last edited by BOB W; 03-08-2010, 11:43 AM.
        This post is for discussion purposes only and should be verified with other sources before actual use.

        Many times I post additional info on the post, Click on "message board" for updated content.

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