Final K-1, Form 1065, Neg Cap Balance

[MTG Accounting and Tax]

I am in need of learning how to report a negative capital balance on a final K-1 where the partnership simply closed, was not sold.  nothing liquidated.   If one of the partners put in $100k and lost it all, is that reported on Sch D as a capital loss?

[jklcpa]

Are you working on the individual return?  If the individual return, please remember that you should be concerned with "outside basis" and not the negative capital balance. We need more information before answering further, such as:

• Were there "hot assets" in this partnership?
• Were any assets distributed out of the partnership to this partner? Did any have loans against them?
• Were there other outstanding liabilities on the partnership books that he shared in?  Was he relieved of responsibility of that debt?