Partners are allowed to treat company debt as basis in some cases. This allows a partner to deduct losses in excess of their tax capital. A partner is allocated any partnership debt for which they bear an economic risk of loss, plus their share of any debt for which none of the other partners specifically bear an economic risk of loss. However, these rules are technical and we suggest you contact us for specifics related to your situation. Please keep copies of all loan documentation, especially guarantees, so that partner basis can be accurately calculated.