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Investors & landlords
the only way to zero out both capital accounts is to transfer the balance in your capital account to his.
this would be a gift between spouses so no gift tax reporting would be required. if you don't do this you will have a balance showing up on the k-1 while your spouse will have a negative balance. this could and I stress could increase audit risk.
in schedule L on the K-1 I would use the other increase/decrease line
‎February 16, 2023
7:00 PM