nctx

Wow...I'm glad I'm not a regular on this forum. I'm also a CPA, and people like you make us look like jerks.

It's an active and ordinary loss. Thanks for your help everyone, I have the answers that I need.

I'm not sure what the "NO!" is for? That is exactly the same thing I proposed...right? $5,000 loss split 50/50 on the 1065 (Like you have above) and $3,000 bad debt for Partner A's 1040 (Like you have above). Am I missing something? As for the other $1k, it is cash in the account which is being closed and disbursed.

So, is the correct way: A ) The $5,000 loss shared 50/50 on the 1065 B ) The $3,000 personal loan from Partner A to Partner B as a short-term capital loss on Partner A's 1040 This seems to result in the same end result for Partner A but also gives Partner B a loss on their K-1.

I realize that, but question is --- Partner A can not collect from Partner B, attempts have been made. And is it really a change in agreement if an agreement was never signed or filed?

I have a semi-complicated situation with a partnership and am looking for the proper way to handle this. Let me lay out the facts: 1. Partnership began with $6,000 investment in 2009 recorded as 50/50 between two partners. In reality, all $6k came from Partner A and we treated the $3k as a personal loan to partner B. 2. Partnership invested $5,000 in business venture which was totally lost (invested as non-refundable down payment for promotional event that never occurred) 3. Partner B never repaid loan to Partner A If possible, I would like to: Dissolve the partnership and reflect the $5k loss all for Partner A I'm wondering if this is possible, and if so, how I can record the capital/losses. Considering this is the first return, can I simply file the 1065 as if Partner A has all along been a significant majority owner since we never filed anything saying it was 50/50? I don't want to file anything fraudulent, but in reality this was 100% Partner A's loss.