P3: party totals by what moved the money, once (defects 14, 11, 24)

Each party's part of an entry is signed as its own account would show it,
with a direction and its cash and in-kind amounts; a reversal is its
original negated. Totals on a cash or all basis: for a member, all equals
the members' equity statement and cash the K-1's cash. Money is cash,
cards and the financing accounts, and a liability credit never pays its
own creditor (creditor_of), so accruals and declared distributions count
once. tin_last4 from the TIN or W-9 facts.

Co-Authored-By: Claude Opus 5.5 <noreply@anthropic.com>
Claude-Session: https://claude.ai/code/session_01T3gXMVt7XJPi6ens1or9Dj

docs/spec/rules.md

@@ -762,8 +762,11 @@ An entry naming several parties (a payment shared between a contractor
 and a member; `ledger_core::shares`) counts only the vendor's share
 toward its 1099: what was paid to the payee (§6041(a)), not what the
 entry moved for others. The share is resolved (`shares::resolve`)
-against the entry's flow, the same target the MCP server checks shares
-against, then scaled to the 1099 payment: the share unchanged when the
+against the entry's target (B-35: its money, or, when it moved none, its
+parties' own-account movement; a reversal's is its original's negated),
+the same target the MCP server checks shares against, then scaled to the
+1099 payment (a ratio, so B-35's signs change no 1099 figure: a reversal
+negates both the payment and the target): the share unchanged when the
 payment equals the target (the usual case, an expense paid from cash or
 by a member), else payment × share ÷ target, rounded to the nearest cent,
 half away from zero (so a part charged to a card scales out, 1099-K). A
@@ -1010,7 +1013,13 @@ happen to end in a known last four is refused the same way (filed as a
 PDF instead).
 A locked vault or a missing TIN never fails
 the package: it says which TINs are missing. `books.purge_tin` deletes a
-party's vault records and journals that it did.
+party's vault records and journals that it did. Wherever the books show a
+party's last four (the directory, `books.party`, the 1099 and K-1
+worksheets, the purge preview) it is the TIN facts', else the W-9
+facts' (`Party::tin_last4`; the two never disagree; exactly four digits
+or nothing, however the facts were built), kept after a purge
+(P3 defect 11: the directory read W-9 facts only, so a member's read as
+missing).
 
 **Enforced:** `crate::parties` (has_full_tin, check_text, W9Facts::check,
 W4Facts::check), `Ledger::add_party`, `update_party`, `set_party_role`,
@@ -1089,9 +1098,10 @@ features already in force (`Store::ensure_feature`): an earlier reader
 stops at the declaration, and books that never use the feature stay
 readable by it. P3's: `members_cumulative` (B-13: a members close counted
 from its count's first close, `"rounding": "cumulative_since"`),
-`account_renamed` (before the first `account.renamed`, B-31) and
+`account_renamed` (before the first `account.renamed`, B-31),
 `require_tax_category` (before the first `settings.set` naming
-`policy.require_tax_category`, B-32). A later piece asks the owner's
+`policy.require_tax_category`, B-32) and `party_creditors` (before the
+first `party.creditor_set`, B-35). A later piece asks the owner's
 go-ahead before the first such declaration (plan D-39).
 
 **Enforced:** `ledger_store::format` (`JournalFormat::admit`, `declared`,
@@ -1646,3 +1656,184 @@ appendix: the file line by line and its changes, derived by hand);
 `iif_without_as_of_is_as_of_today_and_ties_to_the_trial_balance`),
 `mcp_stdio.rs` (`mcp_import_export_over_stdio`,
 `the_default_period_never_shortens_the_iif_or_the_package`).
+
+## B-35 A party's part of an entry, and a party's totals
+
+**Status:** CONVENTION (the sign: B-2's, a line on the party's own
+account); DECISION (the owner, 2026-10-15: `entry_flow`, money paid down
+counted once; the owner, 2026-10-20, P3 design settled with each review's
+recommendation: a member's entry counts what moved their capital, money
+is cash, cards, the members' financing and loans, and a liability credit
+never counts as paying that liability's own creditor); AUTHORITY for what
+a member's capital counts (Treas. Reg. §1.704-1(b)(2)(iv)(b), (c);
+Form 1065 Schedule K-1 instructions, Item L:
+`sources/irs-capital-accounts.md`) and for a promise not being payment
+(Helvering v. Price, 309 U.S. 409 (1940):
+`sources/helvering-v-price-1940.md`). Not ASC 230's cash (see item 8) and
+not the books' accounting method (`books.accounting_basis`).
+
+1. **Sign.** A party's part of an entry is signed as a line on the
+   party's own account would be (debit-positive, B-2): positive, the
+   company paid it or gave it value; negative, the company received from
+   it. A bill is negative (owed to the vendor), an invoice positive.
+2. **Direction, cash, in kind.** Every part carries its direction (paid,
+   received, neither) and what of it moved as money (cash) and as property
+   (in kind); what is neither is a promise still to be settled (a bill, an
+   invoice, a fee on the party's own card, a distribution still owed) or
+   moves nothing with anyone (a close), and counts in no total. A part's
+   cash and in kind have its sign and together never exceed it; what of a
+   paid part is neither (a distribution partly still owed) is a promise,
+   counted when it is paid.
+3. **What the shares split** (`shares::target`), in order:
+   1. A period's closing entry: its parties' own-account movement (the
+      members' equity, when only members are named), else its total
+      debits; neither (B-11, B-13: a close allocates income, it moves
+      nothing with anyone).
+   2. A reversal: its original's target, negated, paid and received
+      swapped, from the root original down (B-9: "a mistake is corrected
+      by an opposite entry"); never re-read from its own lines, because
+      `entry_flow` isn't odd when one liability pays down another (a
+      member paying the card from their own funds, reversed, read as a
+      second payment: P3 design §1.4).
+   3. Every party named has the member role in the directory and the
+      entry moves equity other than retained earnings (E): E, a
+      contribution received (E < 0) or a distribution paid (E > 0).
+      - Of a contribution, in kind is the property in it, at most |E|:
+        what asset accounts that are neither cash nor receivables took in
+        (the K-1 worksheet's test, k1 INVARIANT 3), so property
+        contributed subject to a loan is the member's net property
+        (§1.704-1(b)(2)(iv)(b)(2)). The rest is cash, as the K-1 counts
+        it: money, or what the member paid for the company (an expense
+        booked straight to capital, a debt to them converted,
+        §1.704-1(b)(2)(iv)(c)(1)).
+      - Of a distribution, cash is the money it paid (case 4's net, at
+        most E: §1.704-1(b)(2)(iv)(b)(4)) and in kind the property it
+        gave up, at most what is left, as the books carry it (the
+        statement's figure; (b)(5) counts its fair market value, which
+        stays with the CPA). The rest, credited to a liability that
+        isn't money for the entry (distributions payable, or what the
+        members advanced once they are named its creditors), is still
+        owed: it counts as nothing until it is paid (Helvering v. Price;
+        before the P3 review a distribution declared to distributions
+        payable counted when declared and again when paid, and a
+        distribution of money with depreciated property read the money
+        as property).
+      Read from journaled facts only (roles, the chart, creditors), so a
+      member leaving `[[company.members]]` never changes a posted entry;
+      the settings' members matter only to a derived split among several,
+      which the server journals as amounts when the entry posts.
+   4. Money moved (`parties::entry_flow` net, item 5's accounts less the
+      liabilities owed to a party named): the net, paid (+) or received
+      (−), all of it cash.
+   5. Otherwise its parties' own-account movement (payables, receivables,
+      a liability owed to a party named), else the total debits; neither.
+   The parts split the target as `shares` INVARIANTS 7-12 say: a
+   reversal's parts are exactly its original's negated, and a member's in
+   kind is shared as the K-1 worksheet shares property (in proportion,
+   leftover cents by largest remainder, ties to the member listed first).
+4. **Totals: `basis` cash (the default) or all, always labelled.** Cash
+   counts each part's cash; all adds what moved in kind (Item L counts
+   money and property alike). Each part counts on its root original's
+   side, so a reversal nets what it reverses, and reversing the reversal
+   brings it back. A bill or invoice counts on neither basis (a promise is
+   not payment: Helvering v. Price); `billed`, `invoiced`, `owed` and
+   `receivable` report those. An entry that counts nothing is never
+   unresolved (its target is found before its split). For a member, over
+   the entries that name only members and move their capital, plus the
+   payments of distributions declared to them: basis all's received and
+   paid are the statement of members' equity's contributions and
+   distributions for the same dates, and basis cash's received is the
+   K-1 worksheet's cash contributions, when
+   - each such entry names exactly the members whose capital it moves
+     (derived from their capital lines, or amounts equal to them) and
+     moves every one of them the same way (capital moved from one member
+     to another moves nothing with the company: neither, though the
+     statement shows a distribution and a contribution);
+   - no distribution declared in the span is still unpaid at its end (the
+     statement counts it when declared, party totals when paid); and
+   - no reversal in the span undoes an entry outside it (the statement
+     then counts the reversal by its side; party totals net it on the
+     original's side).
+
+   Over any span at all, even one a reversal straddles, received less
+   paid still agrees with contributions less distributions, given the
+   first two conditions (the property
+   `member_totals_are_the_members_equity_statement` checks every span).
+5. **Money** (P3 defect 24): the cash accounts (`[books] cash_accounts`;
+   every asset account but receivables when none are set), the cards
+   (liability accounts whose names say "card" but not "gift card", the
+   rule the reconciliation reminders read, until payment instruments name
+   them), and `[books] financing_accounts` (what the members advanced,
+   loans). Every other liability (payables, the payroll withholdings, an
+   accrued expense, deferred revenue, gift cards the company sold) is a
+   promise: counted when it is settled, never also when it is booked
+   (before P3 an accrual through any liability but payables and payroll
+   counted twice). So a card account whose name doesn't say "card" is
+   not money until it is listed in `financing_accounts` or an instrument
+   names it, and with `financing_accounts` unset what the members
+   advanced is not money either: a purchase through either then counts
+   for no one until it is paid off (the handbook tells the agent to list
+   them).
+6. **A party's own liabilities.** A party may be named the creditor of
+   the liabilities the company owes it itself (`creditor_of`: a card's
+   issuer, a loan's lender, each member for what the members advanced;
+   `party.creditor_set`, a journal feature). For an entry naming it, a
+   credit to one never counts as paying it (a fee on its card, interest on
+   its loan, equipment on the seller's note: neither, until paid; a
+   distribution credited to the members' financing: still owed), and a
+   debit to one is what the money paid for (a card payment, a
+   reimbursement: paid, as before).
+7. **Known limits**, stated in the tools' text: an entry that both repays
+   a member and distributes to them counts the distribution only; money a
+   member lends under their own name through the members' financing and
+   later converts to capital counts both times (received as a loan, then
+   as a contribution), as does a distribution declared through it while
+   the members aren't named its creditors (paid when declared, and again
+   when paid); an entry naming a payee together with the creditor of the
+   liability that paid it (a vendor and the member who paid it through
+   the members' financing) reads neither for both; an expense a member
+   paid that is booked straight to capital and tagged with the vendor
+   reads neither (the vendor isn't counted as paid; tagged with the
+   member, it is the member's cash contribution). Record them apart, and
+   a member's payment for the company through the members' financing,
+   tagged with the payee: the house conventions already do.
+8. **How party totals relate to the cash flow statement** (B-14, D-42,
+   P3 defect 1). The statement reports the company's cash, ASC 230's: a
+   member paying a vendor for the company is cash borrowed from the member
+   and spent, on that date (a financing inflow and an operating or
+   investing outflow); paying the member back is a financing outflow;
+   property a member contributes, and a debt to them converted to
+   capital, are noncash (disclosed). Party totals report what moved with
+   each party: the vendor is paid when the member pays it (the same date
+   and amount as the statement's outflow); the member is paid back when
+   the statement shows the financing outflow; and a member's capital
+   counts when it moves, a conversion as the cash contribution the K-1
+   calls it (the money they paid for the company), property in kind; a
+   distribution counts when it is paid, as on the statement. Where both
+   show a payment they agree on its amount and date. The statement shows
+   more than party totals do in two places: the financing inflow from a
+   member who pays a vendor is in no party's totals (the entry names the
+   vendor; the member's totals show only the repayment), and an expense
+   booked straight to capital and tagged with the vendor isn't counted
+   as paid to the vendor (item 7). "Cash" in party totals is money
+   through the company's cash accounts, cards and financing (and, on a
+   member's contribution, the K-1's cash), not the statement's ASC 230
+   cash.
+
+**Enforced:** `kernel::party_target`, `kernel::reverse_target`,
+`shares::{target, split, resolve}`, `parties::{flow, money_accounts,
+card_accounts, MoneyAccounts::for_parties, activity_with, Activity::totals,
+Basis}`, `Ledger::set_party_creditor`, `Store::set_party_creditor` (the
+`party_creditors` journal feature, declared before its first line);
+`ledger-mcp` `books.get_entry` (`resolved`, `direction`, `cash`,
+`in_kind`), `books.party` and `books.parties` (`basis`), `books.update_party`
+(`creditor_of`); the viewer's party pages and entry page.
+**Checked:** `ledger-core` `tests/spec_party_totals.rs` (the audit's
+table, the members' equity and K-1 identities over every span, the
+reversed card payment, accruals, a gift card, a party's own liabilities,
+distributions declared or of depreciated property, the properties), Kani
+`party_target_direction_is_its_sign`, `party_target_is_odd`,
+`reverse_target_is_an_involution`, bridge `party_target_agrees`; Lean
+`reverseTarget_involutive`, `capitalTarget_odd`, `partyTarget_odd`,
+`sumOver_movement_reversal`; `ledger-store` `tests/party_creditors.rs`;
+`ledger-mcp` `tests/spec_party_totals.rs`; `ledger-gui` `tests/parties.rs`.

docs/spec/sources/helvering-v-price-1940.md

@@ -0,0 +1,11 @@
+# A promise to pay is not payment: Helvering v. Price, 309 U.S. 409 (1940)
+Governs why a party's totals never count a promise as a payment (rules.md B-35): a bill, a fee charged on the party's own card, equipment bought on the seller's own note, or a distribution still owed counts when it is paid, not when it is promised. The Supreme Court held that a taxpayer reporting on the cash basis who gave his own note, even a secured one, had not paid. Opinions of the Supreme Court are works of the United States Government (`us-public-domain-status.md`).
+
+## Helvering v. Price, 309 U.S. 409, 412-413 (1940)
+Source: <https://tile.loc.gov/storage-services/service/ll/usrep/usrep309/usrep309409/usrep309409.pdf> (United States Reports, Library of Congress)  
+Retrieved: 2026-10-20  
+SHA-256 of the retrieved file (`usrep309409.pdf`): `ac58d7cb0fbe1257c7ad5e75152e540544194c6accabe261b02068f6cebd7efe`
+
+> As the return was on the cash basis, there could be no deduction in the year 1932, unless the substitution of respondent's note in that year constituted a payment in cash or its equivalent. There was no cash payment and under the doctrine of the Eckert case the giving of the taxpayer's own note was not the equivalent of cash to entitle the taxpayer to the deduction.
+
+> Respondent urges that his note was secured, but the collateral was not payment. It was given to secure respondent's promise to pay, and if that promise to pay was not sufficient to warrant the deduction until the promise was made good by actual payment, the giving of security for performance did not transform the promise into the payment required to constitute a deductible loss in the taxable year.

docs/spec/sources/irs-capital-accounts.md

@@ -0,0 +1,35 @@
+# Partners' capital accounts: what a member's money and property count as
+Governs what a member's party totals count (rules.md B-35): a member's capital account rises by the money and the property (net of liabilities on it) the member contributes, and falls by the money and property distributed to them; a partnership liability the member pays for it is money the member contributed. The K-1's capital account analysis (Item L) reports the same contributions and distributions. wanderbooks counts these from the books as they are; the tax-basis figures stay with the CPA.
+
+## Treas. Reg. §1.704-1(b)(2)(iv)(b): basic rules of capital accounts
+Source: <https://www.ecfr.gov/api/renderer/v1/content/enhanced/current/title-26?part=1&section=1.704-1>  
+Retrieved: 2026-10-20  
+SHA-256 of the retrieved file (`ecfr7041.html`): `0eafa6f27d7df3a3cc93ebad7cbdc0c37a49b055c53a43d5e5e8efa29f80beeb`
+
+> (b) Basic rules. Except as otherwise provided in this paragraph (b)(2)(iv), the partners' capital accounts will be considered to be determined and maintained in accordance with the rules of this paragraph (b)(2)(iv) if, and only if, each partner's capital account is increased by
+
+> (1) the amount of money contributed by him to the partnership,
+
+> (2) the fair market value of property contributed by him to the partnership (net of liabilities that the partnership is considered to assume or take subject to), and
+
+> (3) allocations to him of partnership income and gain (or items thereof), including income and gain exempt from tax and income and gain described in paragraph (b)(2)(iv)(g) of this section, but excluding income and gain described in paragraph (b)(4)(i) of this section; and is decreased by
+
+> (4) the amount of money distributed to him by the partnership,
+
+> (5) the fair market value of property distributed to him by the partnership (net of liabilities that such partner is considered to assume or take subject to),
+
+## Treas. Reg. §1.704-1(b)(2)(iv)(c): treatment of liabilities
+Source: as above (the same retrieved file).
+
+> (c) Treatment of liabilities. For purposes of this paragraph (b)(2)(iv),
+
+> (1) money contributed by a partner to a partnership includes the amount of any partnership liabilities that are assumed by such partner (other than liabilities described in paragraph (b)(2)(iv)(b)(5) of this section that are assumed by a distributee partner) but does not include increases in such partner's share of partnership liabilities (see section 752(a)), and
+
+> (2) money distributed to a partner by a partnership includes the amount of such partner's individual liabilities that are assumed by the partnership (other than liabilities described in paragraph (b)(2)(iv)(b)(2) of this section that are assumed by the partnership) but does not include decreases in such partner's share of partnership liabilities (see section 752(b)).
+
+## Partner's Instructions for Schedule K-1 (Form 1065), Item L
+Source: <https://www.irs.gov/instructions/i1065sk1>  
+Retrieved: 2026-10-20  
+SHA-256 of the retrieved file (`i1065sk1.html`): `87d46c0e6c07eb0b642e9479f72aed7c35ed005cab0b1c644af5572a9df22d7c`
+
+> The partnership must report your beginning capital account and ending capital account for the year using the tax-basis method, including the amount of capital you contributed to the partnership during the year, your share of the partnership’s current-year net income or loss as computed for tax purposes, any withdrawals and distributions made to you by the partnership, and any other increases or decreases to your capital account determined in a manner generally consistent with figuring the partner’s adjusted tax basis in its partnership interest (without regard to partnership liabilities), taking into account the rules and principles of sections 705, 722, 733, and 742.