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Partnership Capital Account

Capital account correct in total but not at a Partner level?

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Hi all,

We took over as accountant for a Partnership early this year and it ceased trading 4 months later (transferring them to a LTD company).

I'm now drawing up the final set of accounts/ tax return for the Partnership and the only issue is that one partner is left with a credit on their Capital Account and the other is left with a debit on theirs (although the 2 added together give a small credit in total).

Speaking to the Client (husband and wife), this has been the position for years but they are adament that they both introduced and withdrew exactly the same amounts every year, and share profits 50/50- so we think its down to incorrect book-keeping from years' back.

Given that only the 'total' capital account needs to be reported outside of the Partnership (in the accounts and tax returns) is there anything stopping us from correcting the capital account so that they both have the same, small credit?

many thanks

Andrew  

Replies (2)

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By johngroganjga
23rd Oct 2019 13:27

Provided they agree, of course not.

Thanks (1)
RLI
By lionofludesch
23rd Oct 2019 15:42

For husband and wife, I'd be thinking of a joint capital account.

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