My brother and I have a 50/50 partnership for our farm. We have substantial losses for the last several years. We needed to replace some equipment and the partnership did not have the funds to pay for it so I purchased the equipment out of my pocket for use on the farm. Can I deduct the expense on my personal taxes since I paid for it all, or does it get reported on the partnership return and the expense is split between us?
If these are the kind of questions you have then you really need a local tax professional to educate you on a partnership return so you get it correct ... but basically the partnership gets the deduction and the partner who paid gets an increase in their basis so that the loss can be more deductible for that partner.
Ok, thank you. My brother has always handled the taxes but he had a stroke this year and isn't able to do it. I was just unsure since the equipment still belongs to me, we just use it on the farm.