Skip to main content
Level 2
February 18, 2020

k-1 capital account for partner who left the llc

  • February 18, 2020
  • 1 reply
  • 10 views

We have a partner who left the company (an LLC) and is being paid out his capital account over three years. Should I file a k-1 for the remaining three years reflecting the payments made against their capital account until it reaches zero? Their ownership interest is 0% since their departure, so their k-1 would show 0% share of p/l.

    This topic has been closed for replies.

    1 reply

    qbteachmt
    Level 15
    February 18, 2020

    In other words, the leaving partner left their capital as on loan to the LLC, and is being paid over time? You cannot buy a partner out with their own funds. Who is getting their share of the partnership?

    Don't yell at us; we're volunteers
    Level 2
    February 18, 2020

    Correct, the partner left their capital on as a loan. The two remaining partners went from 33.3% to 50% owners.

    qbteachmt
    Level 15
    February 18, 2020

    Lenders don't get a K-1.

    Don't yell at us; we're volunteers