A 4-member LLC reduced to 1 member effective January 1, 2010. How is the 2010 Return filed; Form 1065 or Sch C? All returns for the previous years have been on Form 1065. Comments appreciated.
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Was 2009 marked "FINAL?" If not, I would file a 1065 (short year - one day) for 2010 and mark as such just to get out of the IRS computers. Then Sche C for 2010. -
What event occurred on 1-1-10 that terminated the partnership interest of 3 partners?Comment
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ttbtaxes asked the BIG question. I was just doing some research on a partnership sale and from what I am reading, how this is treated would depend on whether the 3 partners sold their share of the partnership to the one remaining or whether they retired.
There would have to be 1 tax return that shows the disposition of the assets or property of 3 partners to the one remaining partner. It would either be on 2009 or 2010 if that is when the partnership changed.
One thing it did say is that if it is a liquidation or retirement of a partner the partnership remains an active partnership until the final payment is made to the retiring partner. BUT if one partner purchases the other partners share it is an immediate termination.
This information is in NCPE 2009 textbook from their Partnership and Corporations seminar in chapter 12.
Linda, EAComment
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You are correct, and I should have expanded on my relatively short answer. I, too, was thinking later -- what happened to the assets & were distributions made?Comment
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