Negative Partnership Basis

[equinecpa]

I'm doing a tax return where one partner has a negative basis (partnership has small losses each year). In 2009 this partner married the other partner. The partner with the negative basis does not work outside of the partnership.

Can I divide the capital contributed to the partnership in 2009 equally or should I allocate it to the partner who has the outside income? I asked the partners who contributed what but since they co-mingle their finances they have no idea.

[Lion]

Partnership Agreement

What does their partnership agreement say about making additional contributions as needed to cover expenses? Are they 50/50 for ownership, profit, and loss? Did the funds paid in come from a joint account? Do they care? You might suggest the one with the negative basis contribute monies. Let them make the call.

[equinecpa]

I don't believe they have a written agreement-but the partnership is 70/30 (the one with no basis is the smaller partnership interest). Funds came from joint account. Do they care? No.

[Lion]

Whatever!

I'd probably make contributions from the negative basis partner to get him/her positive again and then in whatever proportion needed to move closer to their 70/30 split. But, I'd suggest that to them and still require them to make the call. You don't want to get blamed for unequal ownership if/when they divorce!