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Get your taxes done using TurboTax
Negative Retained Earnings does not constitute Recourse Debt. You need to check your Partner Capital reconciliation to ensure you have balanced the net loss for the year with the ending Capital account balance of $-65k per your example. Also, look at your balance sheet line item balances for Liabilities & Capital on the balance sheet to see what the opposite entry is to offset the negative retained earnings to get the balance sheet in balance.
If the partners have loaned the partnership monies to support the business, those loans are non-recourse debt to the partnership. If the partnership has obtained a loan from a financial institution to support the business, the loan is non-recourse unless one or all of the partners had to make a personal guarantee. If a personal guarantee was made, the business has recourse debt that needs to be allocated to the partners either by the Profit share percentage, Loss share percentage, or Ownership percentage, or a Special Allocation.
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