I was a minor investor in a Limited Partnership. This partnership lasted 11 1/2 years and eventually went bankrupt in 2020. This partnership never returned any capital to me. The partnership also promised, in writing, 8% interest cumulative annualized on the capital invested until the investors were paid back in full. Unfortunately, not only did I not receive 8% interest for any of the 11 1/2 years, I also lost 100% of their capital.
During the first 5 years, I was able to write off part of the loss because I was an active partner. For the years remaining I was passive and not able to write off any losses.
The partnership never filed a K-1 since 2018 and the partnership went bankrupt on 2/29/2020. I now want to write off the remaining capital for the passive activity plus all the 8% interest promised on the unpaid capital. For the entire 11 1/2 years.
The question is, can I write off any/all that interest on my 2020 return? Also, when switching from active to passive participation is there anything that needs to be noted on form1065, or can I write off the remaining capital loss?
