How do I deal with partners personal loans on company books if I want to leave 50/50 partner

A lot of people use the term "partner" loosely, and you may be doing so.  If you are really referring to a general partnership, and your partnership agreement doesn't expressly deal with this issue, then each general partner is personally liable for the debts of the partnership, here the loans your partner made to the partnership.  If the partnership owed $100 to a third party, and couldn't pay, you would personally be responsible for paying the entire $100, but could sue your partner for his 50%.  Here, since the loan is owed to your partner, you would only be responsible for paying half.  Thus, if the partnership has $100 in assets, and its only liability was $50 of loans owed your partner, your share in the partnership would be worth $25 (1/2 of $100 minus 1/2 of $50.)  Of course, anything the partnership owes you has value to you, so if you were going to give up your rights to be repaid when you sold out, you should get more money for it.  Obviously this is oversimplified, but basically you're going to have to factor in the partnership's liabilities, including the debts owed your partner, in calculating how much your share is worth.  Loans owed your partner would decrease the value; loans owed to you would increase it (assuming you're going to release the loans when you sell your share.)  As for how it is handled on the books, an accountant would be better equipped to tell you how it can best be structured for tax purposes.