50/50 partnership buyout by one ptr
What is the best way to continue an LLC ptnrship where one ptr buys out the other? Add on a new ptr or can the LLC activity start being reported on remaining owner's Schedule C with same FID#?
1
525
dVPe6c3IOr4iYiacwZ5xHE
09/13/11 10:08am PDT
Viewed by asker 09/14/11 3:39pm PDT
Viewed by asker 09/14/11 3:39pm PDT
19 Replies
IRMN
Questions asked: 53
Questions answered: 16302
Points earned: 52292
Questions answered: 16302
Points earned: 52292
Accountant Community AllStar
Advisory council of Accountant community power users.
Intuit Moderator
Mod/Co-mod
09/13/11 10:51am PDT
The schedule C route works just fine.
If this answers your question please click, um, ok I forgot what you are supposed to click. If this answered your question, how about just saying thanks and we will call it good.
09/13/11 11:08am PDT
I want to know as well. Maybe Taxiowa made him do it since she is majority S/H of ACME?
09/13/11 11:10am PDT
Actually, I consider it an improvement over that last beastly picture. This one at least looks semi healthy albeit a little hairy.
09/13/11 11:36am PDT
I need to take off a few pounds and I recently got a memo saying trolls shouldn't be fed so I thought I would try the troll diet for awhile. The only trouble is, I can't do a thing with this hair.
09/13/11 12:03pm PDT
No more 'Yote? What are you going to do with all the Acme anvils you have collected?
09/13/11 12:22pm PDT
I have just notified the editors of ACME catalog. The next printing will not have troll dolls and polyjuice potion on the same page. Sorry for any inconvenience this may have caused. He should be back to normal in about an hour.
09/13/11 2:10pm PDT
Mojo - I'm trading the anvils in for more points.
Taxiowa - I'm not back to normal yet, but I am getting really hungry. Anybody have like a Kit Kat or Snickers bar they would be willing to share?
09/13/11 2:22pm PDT
Check out the answer to #2. http://library.thinkquest.org/12924/nr6.htm
taxiowa
Questions asked: 23
Questions answered: 2238
Points earned: 8636
Questions answered: 2238
Points earned: 8636
Accountant Community AllStar
Advisory council of Accountant community power users.
09/13/11 10:51am PDT
LLC can start reporting on single owners Schedule C under their SS# if they like, provided they do not have employees or pension plan. They cannot use old EIN of partnership on their Schedule C. They need new EIN in this case.
Adding on a new partner can be somewhat tricky especially since it sounds like one partner already bought out other. Because once it becomes one owner it is no longer a partnership so you would basically have to create a new LLC with two partners. This would then also require a new EIN.
EDIT: See under partnerships http://www.irs.gov/businesses/small/article/0,,id=98011,00.html
09/13/11 6:17pm PDT
For purposes of subsection (a), a partnership shall be
considered as terminated only if -
(A) no part of any business, financial operation, or venture
of the partnership continues to be carried on by any of its
partners in a partnership, or
(B) within a 12-month period there is a sale or exchange of
50 percent or more of the total interest in partnership capital
and profits.
Section 708(b), IRS code
09/13/11 6:44pm PDT
Therefore, the partnership is terminated per subsection (B) since there was a sale or exchange of 50 percent or more of the total interest in partnership capital and profits, if I am interpreting subsection (B) correctly.
09/14/11 7:36am PDT
It is also terminated because a partnership needs at least 2 partners.
09/15/11 9:43pm PDT
So if A & B are partners, it would be better for B to sell his/her interest to C, then for A to make a 754 election when adding C as a partner?
09/16/11 7:35am PDT
Latest post
Better for whom? Maybe. What if A doesn't want to be partners with C? It also depends on what assets are owned by the partnership.
