I loaned my (3 member) LLC money, how do I code the 1065, and Schedule K Reconciliation Worksheet?

[Tellerik]

I loaned ex ($3000) to the LLC (3 partner LLC) this last year. It shows up on 1065 Schedule L, line19a as $3000. Which gets transfered to the Partners' Liabilities Smart Worksheet in Line D, for $3000.

How should Form 1065 Schedule K Reconciliation sheet be coded in the K-1 K(3) Liab column? $1000 for each partner or $1500 for the other partners, and 0 for me?

Thanks

[Critter-3]

YOU loaned the money so only YOU get full credit added to your basis.

[Rick19744]

I agree with @Critter-3. 

You need to code this as recourse debt allocated specifically to you (100%).

[Tellerik]

Thanks for your feedback, however I am a little confused, how do I allocate 100% to me?  On the 1065 Schedule L, Partner's Liabilities Smart Worksheet, I have the $3000 in line D "Recourse".   However on the Schedule K Reconciliation form, how should I enter the values in the K-1 K(3) Liab column?  Do I enter $3000 under my name or $1500 for each of the other partners?  Please answer as if you are talking to a newbee, as that is what I am.  🙂

Thanks

[Tellerik]

OK, I might be getting somewhere.  I created a SA - Special Allocation on the K-1 Worksheet and then entered that on the Partner's Liabilities Smart Worksheet.  My question is, should the Partners' Liability be allocated 100% to me or 50% to each of the other two partners.  Remember, I am the one that loaned the money to the Partnership.  Thanks.

[Rick19744]

100% to you.  You loaned the money.  You are the member that is at-risk if the money is not paid.  So, 100% recourse to you.

[Tellerik]

Thanks Rick, I don't think I really understood the term 'Recourse' at first.  After reading more and your response, I get it, that it is the person that is at Risk, which would be me.  So I coded the SA (Special Allocation) in TurboTax 1065 form to list me 100% for the Recourse amount.  Thanks for your help.

[Rick19744]

You are welcome.