michaelmars Posted March 12, 2012 Report Posted March 12, 2012 3 guys enter into a partnership with only one active. the active partner doesn't pay the mortgage and the bank eventually takes the money from one of the passive partners that guarenteed the loan. The business gets sold for the amount of other outstanding debt. There is no cash distribution to the partners. I do not prepare the partnership, i only do the return for the partner that had the money taken from his bank account. My question is how to handle the money taken. Is it added to his basis which would be outside of the partnership, is it a bad debt, ordinary loss etc.??? Quote
Pacun Posted March 13, 2012 Report Posted March 13, 2012 I would add it to the basis and take a loss when the partnership was sold. Quote
michaelmars Posted March 13, 2012 Author Report Posted March 13, 2012 thats my inclination too but i started second guessing myself if its not an ordinary loss somehow, or casualty loss. Quote
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