I am filing a final return for an LLC that has never had any income or depreciation. Original capital accounts for three partners totaled $50,000. There was no cash to distribute at closure. How do I reflect this on the 1065 Schedule M-2? Do I decrease the accounts to 0.00 on Line 7 (other decreases)? If so, what is the itemization language for "capital account loss at business closure"? Or ... does the balance on Line 9 (balance at end of year) remain at $50,000 and the partners claim the loss individually on their returns? Thanks in advance for any help!
