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partnership loss closing business

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Level 4

I have 50/50 partners that did not have a partnership agreement. Only one partner put up the capital.

They have had the business about 2 years and are closing it generating a $20,000 loss. Is the one partner entitled to  a portion of the loss since he did not put up anything and there was no agreement.

 

thx

Michele

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2 Replies 2
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Level 15

You partnership probably has a least a verbal partnership agreement. Look at the partner basis schedule to help you determine if "the one partner entitled to  a portion of the loss since he did not put up anything "


ex-AllStar
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Level 4

He did not have any basis so I would assume he would not be entitled to the loss. The business lost money both years it was in business and and he had no  money in the business. The k-1 he brought in was prepared somewhere else. 

thx

Michele

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