Loan to Partnership
ProSeries : 2011On a 50/50 LLC Partnership return, I have one partner lending $13000 as a loan to the partnership. Where or what line in of his schedule-k do I enter the laon from the partner to the partnership.
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02/06/12 9:21pm PST
Viewed by asker 02/12/12 11:41am PST
Viewed by asker 02/12/12 11:41am PST
10 Replies
sjrcpa
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02/07/12 7:58am PST
Nowhere. It is a liability on the balance sheet.
The more I know, the more I don't know.
02/07/12 8:59am PST
It goes on the Schedule L, Balance sheet, but I would enter it on the "Partner's Basis Computation (Partner Name)", Line 3, Increase in share of liabilities. I will have to do this for the first time in this software this year, but I assume that this is where the numbers will go.
02/08/12 6:51pm PST
Ektelon:
Were you able to get the recourse loan to flow properly? I see where it is supposed to go (Increas in recourse liabilities), but I cannot get it to go there without an over-ride. I read the specail allocation instructions, etc., but . . . I must be missing something. If it works for you, please let me know how you made the entry. Thank you.
02/08/12 8:43pm PST
It goes on Schedule L "Balance sheet per Book" under current liabilities line 17, that flows to Partner's Liabilities Smart Worksheet, and it shows on lind D "Recourse" then it flows to Partner's schedule K-1 under "K" Partner's share of liabiliies at year-end.
02/09/12 7:57am PST
Latest post
When I put it is Schedule L, Line 19a, then use the Partners' Liablity Smart Worksheet immediately below, indicating the amount is recourse (line D), it still allocates the recourse loan to all partners based on their percentages, instead of the lending partner at 100%. Did you get teh special allocation you were looking for?
02/08/12 4:22pm PST
Partners have a Capital Account that shows the money contributed to the partnership and money withdrawn from the partnership. The Capital Account is part of the information on the partners K-1. Their capital is also affected by net earnings from the entity and other factors that are reported on the K-1.
If a partner "loaned' money to the partnership, it is reported within his Capital Account and it has a direct effect on his/her basis in the entity. It is not reported on the Balance Sheet.
Go to page one of the return and report capital contributions by double clicking the number of partners listed on "I". This information will flow through to the K-1. This is also where you report distributions, assuming they were not Guaranteed Payments. If they were Guaranteed Payments they are reported on the same form under "T".
02/08/12 5:21pm PST
Todd, a partner can make a loan to a partnership. This is separate and apart from any capital contribution and the partner's capital account.
02/08/12 5:29pm PST
The solution
Snowbank, I need respectfully disagree with you.
The loan balance is a liability of the partnership and belongs on the "Schedule L, Loans from partners." Additionally, loans from a partner to the partnership is a recourse loan of the lending partner, and belong on the K-1 as an increase in recourse loans.
