A partner withdrew more money in 2000 than was eventually allocated to him as income for 2000. His 2000 K-1 shows a negative capital account of $7000. He quit in December 2000.
For 2001, the CPA prepared him a K-1, showing earned income equal to the $7000 negative capital account. He did not work at all in 2001. The doc says that a terminated participant gets a contribution if they work even 1 hour. He worked "0" in 2001. Will they have to make a contribution for him, if this $7000 shows on the earned income line of his K-1. Is this like the severance issue????? Thanks