Partnership Interest LLC

[S T]

Well I just came across something I have never encountered - Guess it could be pretty simple - but not sure

Mother invested funds in a LLC (Limited partner/LLC Member) total was 6.667% to be split among the Mother/Daughter 1/Daughter 2) So the original Schedule K-1 was issued in all 3 names with 2.22% and of course we had passive "rental" losses and other passive losses.

All of the above is reported and noted in each of the 3 returns for the last 2 prior returns

NOW - for 2010 the LLC decides they don't want to report that way and only provide a K-1 in the Mother's name for 6.67% and refuse to issue as a 3 way split (didn't think that was possible - based on investment)

My question is how to remove the prior losses from Daughter 1 and Daughter 2 tax returns and transfer to Mother's Return ( LLC clearly shows on 2010 reporting the adjustment in the capital account - etc) without any disposition.

Grr! Always something to complicate

Sandy

[Davc]

You need to ascertain the actual facts. There is a form for reporting information differently than what a K-1 shows or when a K-1 is not received, The TP might want to let the LLC know that form will be used if the single K-1 is not correct. This could result in proper reporting.

[S T]

Form 8082??

Thanks DaveC - but I am not sure this form applies

Based on info provided to the t/p - the Partnership did NOT want to issue 3 k_1 forms for a 2.22% interest in 2010 although they did in 2009 - Mother, Daughter 1 and Daughter 2

So what the Partnership did was revert all back to the Mother's account as 6.666/6.667 % showing under her ID for 2010

Sounds like the Accountant/Preparer is "Lazy"

So guess I need to send a letter and have the partnership amend the 2009 K-1 forms to show all on Mother - then amend Mother's return, Daughter 1 and Daughte 2 returns t for 2009 to remove any passive losses.

It is all "passive loss" so has no material effect on tax liability - but does affect any passive loss carryover's to future.

Would that be correct?

Sandy

[Gary2]

Are all three people officially members of the LLC? Or was the idea that the mother, who apparently made the investment, wanted it to be split three ways, much like opening a bank account in two or three names?

[S T]

Can't get

I am unable to obtain a definitive answer

My best guess on past investments is that Mother contributes money from some Trust Funds and when she invests - she let's the Partnership or Investment Account know that certain $$ go to whichever account. I have Partnership Interests on each of the Daughters as well as Brokerage Accounts which have been funded - all under each of the three id #'s - The daughters are now over age 21 - so no longer under the uniform Gift to Minors.

I have another partnership investment that she did this with and there is no problem in reporting to each of the 3 social security #'s

First year on this "particular" partnership X (decided to change mid-stream) they issued 3 K-1 forms under each ID# in 2009 - now they are telling Mother - share is too small to do that - but yet investment overall is close to $ 100K - that is why I said Partnership X - is "lazy" and guess the best remedy is to correct the first year in 2009 all back to Mother's ID#

Seems like no matter how I approach this issue - I will either have amended for 2009 or 2010 or both. I can't deal with it right now as all 3 returns are on extension and I have to get them out here. As I said no impact on tax liability due to "passive loss" being LLC limited partners - but it does have to get corrected.

Thought I would send a overview letter to Mother and let her know the issue - in such a manner that she can foward to partnership requesting some type of correction for either 2009 and/or 2010 - then I will file the amendeds as need be. Once the K-1's were issued just prior to 9/15/11 ----I noticed the issue and we have been requesting info to no avail Accountant/preparer does not want to re-address 2010 - so gues I have to try to get their attention some how, and maybe "that Inconsistent Treatment will work"

Thoughts???

Sandy

S

[Davc]

Until you know for certain the ownership of the interest(s) there's nothing to think about.