1065 sch k-1 Ownership % change due to buyout

Forum|Forum|1 year ago
March 13, 2025
2 replies
18 views

I've got an LLC partnership with 3 owners. One owner was bought out by the other 2 owners. In Pro Series, Sch K-1 Wks, beginning Profit, Loss and Ownership was 33 1/3% for each owner. Ending Ownership needs to be 50% for the 2 remaining owners. When I zero out the percentages for the leaving partner I get an error saying the Intl/Fnl Profit % should be "populated with the percentage that existed immediately prior to the partner's termination." That would be 33 1/3% but if I enter that in the Intl/Fnl % box the owner's K-1 shows an ending % of 33 1/3%, and it should be 0%. I've checked the 'Sale' box and while the profits and other deduction items are not being distributed to the leaving partner's K-1, it seems misleading that the ending Profit, Loss and Ownership %'s still say 33 1/3%.

Anyone else seen this? Is it ok that the ending % still shows 33 1/3%?

ProSeries Professional

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Best answer by dd4vols

did you do the date of change stuff on the "Addl K-1 Info" worksheet?

sjrcpa

Level 15

I get an error saying the Intl/Fnl Profit % should be "populated with the percentage that existed immediately prior to the partner's termination."

That "error" comes right out of the 1065 instructions.

The more I know the more I don’t know.

dd4vols

Answer

Intuit Community Champion

did you do the date of change stuff on the "Addl K-1 Info" worksheet?

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D

DarinB7493Author

Level 3

Thank you! Yes, I have the date input for the weighted average computation, and everything is flowing to the K-1's correctly as far as the income and deductions, etc., even though the Ending % on the partner who left still shows 33 1/3%. Guess I expected the Ending % to be 0% since that what it was on 12/31/24.

dd4vols

Intuit Community Champion

it's the same thing as @sjrcpa stated above about 'immediately prior to termination). The first few times I had a mid-year termination, and did all the right stuff on that "Addl k-1 Info wks" I would see the original % still showing up and freak. But I've gotten used to it now and accept the answer of those with much higher brainpower. (don't like it, but there has to be a reason in the depths of the tax code for showing it that way)

If an answer solves your issue, click on the "Mark as Best Answer" button! Makes it easier for people to find answers to similar questions that have already been posted.

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