ILLMAS Posted March 29, 2019 Report Share Posted March 29, 2019 Can a two partner 1065, reduce one partner share of profits to zero? 50/50 ownership, I just want make it’s not a problem and the business needs to be treated on Sch C. thanks Quote Link to comment Share on other sites More sharing options...
Catherine Posted March 30, 2019 Report Share Posted March 30, 2019 Partners can agree on just about anything; partnerships are very flexible that way. I dunno why anyone would agree to that, but that's not my business. Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 30, 2019 Report Share Posted March 30, 2019 Yeah, partners can still have capital at 50/50 or whatever but gain/loss at 100/0 or anything, as Catherine said. Maybe not enough to pay a guaranteed payment or one easing out of biz. I have a partnership where one has been inactive for a few years and just now has early-onset dementia, so they will probably redo their usual 50/50 after healthy spouse's GP to keep taxpayer's newly won disability. 1 Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 30, 2019 Report Share Posted March 30, 2019 On 3/29/2019 at 5:23 AM, ILLMAS said: , and the business needs to be treated on Sch C. Schedule C ?????? Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 30, 2019 Author Report Share Posted March 30, 2019 50 minutes ago, cbslee said: Schedule C ?????? Thinking disregard entity Quote Link to comment Share on other sites More sharing options...
Lee B Posted March 30, 2019 Report Share Posted March 30, 2019 1 hour ago, ILLMAS said: Thinking disregard entity I am confused, I thought we were talking about a 2 partner 1065 ? Quote Link to comment Share on other sites More sharing options...
Catherine Posted March 31, 2019 Report Share Posted March 31, 2019 2-partner LLC is on a 1065 no matter WHAT percentage of profit and loss is agreed upon. That second partner has to have SOMETHING not at 0% or it's not a partnership. If there is only one, THEN you have an SMLLC which can go on Sch C. 1 Quote Link to comment Share on other sites More sharing options...
mircpa Posted March 31, 2019 Report Share Posted March 31, 2019 Just for the sake of partnership to be alive make other partner 0.01%. Don't you think it will revert to SMLLC if other partner's share goes to 0.00 1 Quote Link to comment Share on other sites More sharing options...
Lion EA Posted March 31, 2019 Report Share Posted March 31, 2019 But, you also have the ownership of capital percentage. Is that still 50%/50% or did one partner buy out the other's capital ownership? The profit percentage does not have to be the same as the capital percentage. 2 Quote Link to comment Share on other sites More sharing options...
ILLMAS Posted March 31, 2019 Author Report Share Posted March 31, 2019 Still 50/50 owners, 50/50 per operating agreement, 2019 board minutes for 2018 okay the change, approved my board members change in profit %. Based on the research I have done, i am getting conflicting information. 1 Quote Link to comment Share on other sites More sharing options...
Catherine Posted April 1, 2019 Report Share Posted April 1, 2019 On 3/31/2019 at 3:51 PM, ILLMAS said: Based on the research I have done, i am getting conflicting information. Put 'em on extension and deal in May. Demand better documentation. 2 Quote Link to comment Share on other sites More sharing options...
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