Partnership Losses

[Unregistered]

Just got a partnership return that is a tee total mess.There has been losses for the last two years mostly due to depreciation,mileage,and guarrented payments.The partner's basis is now at a neg number. Can they take the loss from this years return are will it have to be carried over.They are general partners and not limited and they are at risk for all loans.Does the loss carry over apply to general partners as well as limited partners and partners that are not at risk.Trying to create a balance sheet and my brain is in overdrive.

[Matt Sova]

Liabilities

Liabilities of a partnership increase the basis for general partners. Therefore, even though they have negative equity, the may have a positive basis and losses can be used.

[Bees Knees]

I suggest you use the worksheet in TTB, page 24-6 to see if you have basis to deduct the losses. As Matt said, liabilities increase basis, so you may discover their basis is still greater than zero.

[Bees Knees]

Btw

Just a side note, basis can never go below zero. You can never have negative basis.

[Unregistered]

Thanks

Trying to get this balance sheet to bal I should have remembered about the liabilities but at this point my poor brain is sooooo tired.Thanks again