Nonrecourse Liability

7evin337557 — Tue, 24 Feb 2026 07:04:16 GMT

There is a section for nonrecourse liability in the Partnership tax return. Does this affect the tax calculation at all or is it just informational?

Re: Nonrecourse Liability

RSUMan — Wed, 30 Aug 2023 17:24:44 GMT

Nonrecourse liabilities may affect the tax calculation.

In order to deduct losses, you have to have Basis in your partnership interest.

Only debt that you are fully at risk on creates basis relative to your partnership interest.

If the lender's recourse is solely to the assets of the partnership and the lender does not have recourse to your personal assets (that is, the debt is a Nonrecourse Liability), the partner may be limited on the losses of the partnership that can flow into the Taxable Income calculation.

That is why the TurboTax Schedule K-1 interview says only the ending Nonrecourse liability number may affect the tax calculation.

topic Nonrecourse Liability in Self employed

Nonrecourse Liability

Re: Nonrecourse Liability