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Level 2

Question

Partnership LLC

Forum|Forum|4 years ago
April 8, 2022
1 reply
0 views

How do you calculate adjusted basis of partner's interest in partnership LLC?

If you withdraw funds or pay partner's from partnership LLC, is it considered decrease to interest?

Do you include proceeds from HELOC to finance business an addition to the partner's capital account?

TurboTax Home & Biz Windows

Level 13

Yes, when you withdraw money out of the partnership it decreases your capital account (basis) and any funds you use to finance the partnership are counted as an increase to your capital account.

See Partnership Capital Account for more information on what amounts to use to calculate the basis.

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hero2Author

Level 2

When you use your HELOC to renovate your retail space as leasehold improvements, is this considered increase to capital account even though you have a liability to repay the loan? Would it be a wash?

hero2Author

Level 2

To clarify, was the Heloc issued for your personal residence or for your retail space?

The HELOC is secured on my personal residence but the funds were used for renovation of the office space for my business.