I'm in over my head. CT husband and wife partners selling their entire interest in a NY LLC taxed as a partnership. I know to run the business through sale date (17 December 2007, more or less) including all the usual things like depreciation. I know to report their sale of partnership interest on their 1040, Schedule D with $350,000 sales proceeds and their then-current cost basis. Reread my HRB book on partnerships, which was one of the worst textbooks ever; so printed out their new course which CCH actually provides now. It has me "selling" on paper all assets of the partnership at FMV to the partners. Do I prepare a 4797 for the equipment? The sales contract calls for the buyer to pay $350,000 for the entire interest in the partnership to the partners. What is the FMV of the equipment? It's book value? It's rather specialized computerized equipment that converts books to electronic PDFs and has a rather narrow resale market; this buyer is a French company. The balance sheet is mostly cash and equipment originally $55,000 now depreciated down to about $7,000 and partners' capital accounts.
I had one other partnership dissolve, from non-use mostly, that had almost nothing on it's balance sheet nor P&L. They stopped doing business and dissolved with the secretary of state. I think I worked through the final return OK, but the numbers were so small that any mistakes would've been small. It was years ago.
This current partnership makes $250,000 in profits per year. Of course, he wants to know TODAY how much he'll keep after taxes (federal and NYS and NYC for partnership and federal and NY and CT too for partners) so he can pull out before the closing if he doesn't like the results. And, yes, he has talked in general terms about the sale; and, yes, I've been begging him for details and a copy of sales documents and how they've reached a value for the company and how it breaks down into assets and goodwill and whatever else and suggesting a lawyer well-versed in partnership sales and....
I have church choir rehearsals and pageant rehearsals and am driving up to UConn for daughter's concert and we're expecting sleet making traveling slow. Tomorrow I have a client coming and go to an out-of-town client's for another eight hours and return in time for more rehearsals Monday night. Why do these people suddenly appear during the holidays when you've been asking them questions all year? But, I've done their returns for a few years, it's a big client with the partnership and personal and two sons and big fees for her self-employment and their out-of-state partnership and lots of stock transactions on all the returns and.... He even gave me an advance this fall thinking they might negotiate a sale, so he's expecting to be able to call on me. I was expecting to be able to step through the returns, textbooks open, over a few days, with time to ask specific questions as they arose, both of them and of colleagues locally and on these boards. He wants "a number" NOW.
The two texts I've read don't really step me through the final return with this phantom sale at FMV of all assets to partners. Can any of you? I have prior year partnerships on ATX. If you'd like a more formal look, and a fee for your time, that's fine. All guidance is warmly welcomed.
I had one other partnership dissolve, from non-use mostly, that had almost nothing on it's balance sheet nor P&L. They stopped doing business and dissolved with the secretary of state. I think I worked through the final return OK, but the numbers were so small that any mistakes would've been small. It was years ago.
This current partnership makes $250,000 in profits per year. Of course, he wants to know TODAY how much he'll keep after taxes (federal and NYS and NYC for partnership and federal and NY and CT too for partners) so he can pull out before the closing if he doesn't like the results. And, yes, he has talked in general terms about the sale; and, yes, I've been begging him for details and a copy of sales documents and how they've reached a value for the company and how it breaks down into assets and goodwill and whatever else and suggesting a lawyer well-versed in partnership sales and....
I have church choir rehearsals and pageant rehearsals and am driving up to UConn for daughter's concert and we're expecting sleet making traveling slow. Tomorrow I have a client coming and go to an out-of-town client's for another eight hours and return in time for more rehearsals Monday night. Why do these people suddenly appear during the holidays when you've been asking them questions all year? But, I've done their returns for a few years, it's a big client with the partnership and personal and two sons and big fees for her self-employment and their out-of-state partnership and lots of stock transactions on all the returns and.... He even gave me an advance this fall thinking they might negotiate a sale, so he's expecting to be able to call on me. I was expecting to be able to step through the returns, textbooks open, over a few days, with time to ask specific questions as they arose, both of them and of colleagues locally and on these boards. He wants "a number" NOW.
The two texts I've read don't really step me through the final return with this phantom sale at FMV of all assets to partners. Can any of you? I have prior year partnerships on ATX. If you'd like a more formal look, and a fee for your time, that's fine. All guidance is warmly welcomed.
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