1065 Experts---Please HELP!!!!

[Super Mom]

I have a 2 member LLC where one partner bought out the other partner BUT has not paid in full yet. The contract reads that the bought out partner will give up any claim to assets after paid in full in 5 years. I just spoke to the bought out partner and he said it was his understanding that he would continue to get k-1's until paid off and that he has to stay on the partnership because of a loan they have that has his name on it. So I guess I do like my original thought, show him at 0% in profit and loss and just show a percentage in capital. I guess I adjust the detail form for the K-1 to make it fit up until August for his share of profit or loss up until then. Anyone that has done this, sound right? Any advice is MUCH appreciated as this is a whole learning experience for me! Thanks!!!

I have been back and forth as to whether to dissolve the partnership and let the single member elect C. But, after talking to the bought out partner, I am back to continuing the partnership. Help!!!!!

[claud46]

Is this a conditional sale requiring an Atty's answer.
New "owner?" do not "own" assets until he pays in full
Is the new Owner entitled to anything since he is not
entitled to the "assets"

[Super Mom]

If you are referring to the remaining partner, he has 100% of the profits, 100% of the losses and still is 50% of capital, I would be showing one partner as 50% on capital only until he is paid off. The remaining partner is entitled to 50% of the assets, the contract reads that the bought out partner will give up all claims to assets after paid off.