Some comments on your question(s):
- Partnership A needs to record its investment in Partnership B on the balance; typically line 8 of Schedule L
- How you record this investment depends on how you are maintaining your books and records
- Some may record this in accordance with GAAP
- Some may record this as a tax basis in their investment (which you need to maintain in some manner)
- Regardless of the method of recording this on the balance sheet, Partnership A will have book to tax differences that need to be recorded and adjusted on their books and records
- Partnership A does not need to specifically record any of the liabilities that are reflected on the K-1 received from Partnership B, however, those liabilities need to be passed through to the partners in Partnership A (along with their respective share of liabilities of Partnership A) retaining their same character.
- Both partnerships need to pay attention to the questions in Schedule B as a result of the ownership structure and respond keeping in mind the rules of attribution (constructive ownership). These rules are beyond the scope of a forum such as this.
*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.
