What is the proper disposition of a partnership loan that was made from a partner who has a debit balance in the capital account?   A. The loan is ignored in liquidation.   B. The loan is offset against the debit balance in the capital account.   C. The loan is charged off to the capital accounts of all the partners in their profit and loss sharing ratios.   D. The loan is held for payment after all other capital accounts are covered.

SWFT Essntl Tax Individ/Bus Entities 2020
23rd Edition
ISBN:9780357391266
Author:Nellen
Publisher:Nellen
Chapter14: Partnerships And Limited Liability Entities
Section: Chapter Questions
Problem 1BD
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What is the proper disposition of a partnership loan that was made from a partner who has a debit balance in the capital account?

  A.

The loan is ignored in liquidation.

  B.

The loan is offset against the debit balance in the capital account.

  C.

The loan is charged off to the capital accounts of all the partners in their profit and loss sharing ratios.

  D.

The loan is held for payment after all other capital accounts are covered.

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