should there be an obligation to restore negative capital accounts
Obligation to Restore. Upon termination of the partnership, the partner with a negative capital account must pay back or restore the amount owed to the partnership. This must be done by the end of the year in which the partnership is terminated or within 90 days of the termination, whichever is later.n the event a partner has withdrawn assets over the life of the company, those withdrawals are deducted from the capital account. However, that partnerâs original basis in the partnership is not reduced.