Last year I received a K1 for business income I also received a Summary of Stock Ownership showing the transfer of 50% of the stock to me. Both of the forms were filed with our company taxes. My business partner has now decided that I am not a partner and I am told is amending the taxes for 2013 and I have not received any information from out accountant other than to be told the taxes are being changed. =====>> The PS undergoing a technical termination has to file two short-year returns, and the date of the transaction involving a sale or exchange of PS interest that triggers a technical termination becomes the close of the tax year for the old PS. The tax return of the old PS should have the technical termination. Since, upon the technical termination of a partnership, it is deemed that the old PS contributes all of its assets and liabilities to the new PS, the ending balance sheet of the old PS be zeroed out. A statement should be attached to the tax return explaining the transaction(s) that triggered the technical termination and showing what the ending balance sheet was immediately prior to the PS termination. The Schs K-1 of the partners of the old PS should reflect zero ending capital accounts and should be marked final. once a PS terminates, the ending percentages of each partner immediately before PS termination should be reflected on Item J of each partner's Sch K-1.
I have also not received a K1 for this year. Can this be done without my consent since it effects my personal taxes?=====>>>>> Profits / losses pass through to each partner's personal tax return, thus when a PS is terminated under a technical termination(but the PS continues as a legal entity with the same EIN#.)
, the partners record losses according to personal interest percentages in the PS. The initial indication that you have disposed of the partnership interest should be evident from your Sch K-1. Get a copy of the Sch K-1recording all profits / losses to pass through to the partners. If you sell your partnership interest, you MAY BE required to file IRS Form 8308 . You’d/should receive a form 8308 with your Sch k1 from the PS IF you sold your PS interest that included section 751 assets. In this case, Form 8308 is attached to Form 1065 for the tax year of the PS. The reporting party files the 8308 with the PS . Since there has been a sale of 50 percent or more of the total interest in PS capital and profits within a 12-month period, the taxable year of the PS closes; when a PS is dissolved, the partners have to work together to ensure that everything is taken care of in a fair manner. Basically, when a biz operates as a PS, the partners each report a percentage which is usually the same as their percentage of ownership of annual earnings on their 1040s. As a result, the tax effects of the PS that makes liquidating distributions only impacts the partners who receive them. To be taxed as a liquidating distribution, however, your interest in the PS must terminate. Generally, you may not claim your share of a partnership loss including a capital loss to the extent that it is greater than the adjusted basis of your PS interest at the end of thePS’s tax year.
The sale or exchange of a partner's interest in a PS usually results in capital gain or loss.The PS is not responsible for keeping the information needed to figure the basis of your PS interest. Although the PS does provide an analysis of the changes to your capital account in item L of Sch K-1, that information is based on the PS’s books and records and cannot be used to figure your basis.