qbteachmt
Level 15

"It was for 100%."

I keep rereading this and I am sorry, but I am so confused. You first told us: "it was just one of these 2 partners as 99% owner and the two partners that were bought out as .05% owners"

And:

"The prior .05% partners did not have their 2020 K-1s marked as final."

And so now, instead of thinking you had the decimal incorrect (100% minus the individual person owning 99% = 1%), what you might have meant is:

"There were two previous partners still in the partnership and still have these minimal % ownership for 2020 and got their guaranteed payments and their K-1."

Because in that case, they would be Partners, still unless they sold in 2020.

And, in 2021, they were getting some sort of payment? And their participation is whatever it is based on their relationship to the LLC (unless they sold their portion or forfeited it?), and there is no notation for why they are getting over $60k in 2021?

Your title includes: "the year after the LLC is sold"

Which sure led me to understand: "Two partners. In 2020, they had bought LLC that they both previously worked for."

So, to cut to the chase: Anyone who bought the LLC, gets everything with it. Because this sale does not change or affect the LLC. It's like musical chairs. The people in the chairs, might have changed. The LLC is like the Room, and the room did not change. No one bought the chairs, the piano, etc, and carried them out to do business with them elsewhere.

So, going back to: "But now in 2021 they wouldn't be. Unless that is why the 2020 K-1 wasn't marked as final and I am still supposed to issue a K-1 with the $60,960 as guaranteed payments, but no other activity on the K-1."

Well, someone needs to know why they kept getting money. Someone needs to know what happened to their ownership position.

"Or do I issue a 1099 to that partner?"

You cannot use that word "Partner" and "1099" because you don't get a 1099 from your own entity, unless there is a separate business you are conducting or a separate entity and the two entities have done some reportable business between them. Such as, the LLC is paying interest on debt to that person as a lender, and that is 1099-Int. Or, the LLC is renting equipment or an office space and that would be reportable on 1099-Misc.

 

Sometimes too much information really is too much information. You will need to learn about 2020, take everything sequentially, follow what appears to be loose ends, and then 2021 should make more sense.

*******************************
Don't yell at us; we're volunteers