How do you modify K-1's when income/loss is not in proportion to their partnership interest

Forum|Forum|1 year ago
February 25, 2025
1 reply
11 views

I have an LLC with two members, 60%/40% partnership.

However, per their Operating agreement, the 60% partner reports 100% of income/loss until he recovers his investment.

Where do I change this so that 100% income/loss is reflected on his K-1 and the 40% partner's is zero?

Thank you.

ProSeries Professional

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Best answer by dascpa

Forgive my ignorance, but I don't see any tiny boxes.

This is what I have entered under Special Allocations:

First I have only entered the percentage, then since it didn't change anything, I also have entered the actual loss amount.

By ratio: By Amount

#1 100% A -25,598

#2 B

#3 C

#4 D

T

U

V

First off on the K-1 worksheet it's EITHER % or $, don't enter both.

I said on the Schedule K worksheet enter the code.

dascpa

Level 11

Look at the Special Allocations section on the K-1 worksheet for each owner.

E

evaAuthor

Level 4

Thank you much for the response. I have entered 100% and 0% respectively and the 100% amount of the loss for the 60% partner but nothing changed. The K-1's still show the 60/40 split. :((

What else to do?

dascpa

Level 11

Special Allocations have codes (1-4) and (A-D). you need to enter the code on the Schedule K worksheet so the program knows to use those numbers/percentages instead of the standard numbers. That's what those tiny little boxes are for. SA code.

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