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Closed LLC (husband/wife) 09/2017. Liab were assumed by us pers. Pers. Bankruptcy filed in October. Are liab written off to owner’s cont. for tax purposes on 1065?

Forum|Forum|7 years ago
June 6, 2019
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Trying to understand how to close out the balance sheet and record properly on business final return. Bankruptcy hasn't been discharged yet as of 03/03/18 but filed 10/10/17.

Best answer by Rick19744

A few comments:

I am assuming that you have been filing a form 1065 based on your facts.
A partner's assumption of a partnership liability is considered a deemed capital contribution. The accounting for this would be to Dr. the liability and Cr. Partners capital.
Hopefully you have requested an extension to file your final return as based on your facts the original due date would have been 12/15/2017.

Rick19744Answer

Employee

A few comments:

I am assuming that you have been filing a form 1065 based on your facts.
A partner's assumption of a partnership liability is considered a deemed capital contribution. The accounting for this would be to Dr. the liability and Cr. Partners capital.
Hopefully you have requested an extension to file your final return as based on your facts the original due date would have been 12/15/2017.

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

F

FinalYear1009Author

Thank you so much for answering this. Unfortunately no, I did not file an extension. I suppose I should have realized that it was due 12/15 but, I did not. I thought it was due on 03/15.