Partner 1 owns 20% of a canadian partnership. Partner 2 owns 80% and has invested $10,000. Partner 1 has invested no capital but has drawn $10,000 resulting in negative capital at the time of dissolving the partnership. A new partner 3 joins Partner 2 and has invested $3,000 and is a 50 % partner. Can the negative capital be written off into the income statement at change of ownership? Would it be wages, loss on dissolution or Goodwill?
