Here is the situation: 

I have a negative capital account in 2023 for my partnership and I was told I could not take deductions if my capital account was negative. It was negative at the beginning and the end of the year.

Even though my capital account is negative, my share of business income was positive (over $800k income) and I see that in ProSeries on Sch E as nonpassive income (I own the majority of the partnership and materially participate). 

There are deductions on the K-1 such as 179 deduction for 7,109 and I see that on Form 4562 in ProSeries and Carryover for disallowed deduction is 0 so I am allowed that deduction on my tax return.

I was told if I had a negative capital account that I couldn't take any deductions, is that true? If so, I am concerned as it appears I am taking the 179 deduction. Or is it if your share of the business income is negative and your capital account is negative then you cannot take the deduction?

There are also 35k of other deductions which comprises of 300 cash contributions and the rest is amounts paid for medical insurance. The 300 does transfer to my Sch A automatically and the amount paid for insurance goes to Sch A for Other self employed health insurance and is on A but I didn't benefit from the deduction as my 7.5% of AGI is really high.

One of my clients wants us to review 10 years worth of returns to ensure he gets all the deductions.

Can I take deductions from my K-1 even if my capital account is negative?