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?

[FinalYear1009]

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.

[Rick19744 · Accepted solution]

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.

[FinalYear1009]

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.