You stated, "they did it themselves on Legalzoom." Did what? You cannot state there is not much of an agreement, then pull up the Secretary of State website where they filed the LLC paperwork and are running this under an entity. I probably should have stated that there wasn't much of an agreement as to how the 150K was going to be labled and when and how it will be paid back. There is a legal partnership agreement, it's just vague. It does not state who contributed what nor does it state how the losses should be divided.

That's why the reference to a lawyer keeps coming up. They can't make an initial mess, then try to walk away to their tax benefit, and expect either process to be the right legal process.  I'm not sure what a lawyer will do at this point. I don't think the dad is overly concerned about getting paid back. If they made a mistake by not stating who gets to report the losses then that's on them and they might not get the full benefit. I'm just trying to figure out what they can legally do?

And you mention goodwill. That implies someone sold something, they bought that something, and everyone is supposed to agree on what was purchased and by value. So that other party also has some evidence that something was in fact in place and is much of an agreement. Correct, there is a purchase contract between the old owner and the partnership. Sorry, I'm not sure what you're implying?