One partner was bought out by a new partner so I need to transfer his ending capital to the new partner and he should have zero as the ending capital. Every time I try to do so in ProConnect under the special allocation section it does not show up on the schedule k-1. I would like to know what are the proper steps to get this done ASAP. Thank you!
Show a distribution of the ending capital to the departing partner.
Add that amount as a contribution to the entering partner.
Both will like have an outside basis to contend with on their personal returns.
Thank you. The departing partner did not receive that money though. He sold his interest for cash of $25,000. Would that change anything?
Regardless of the entries in the Partnership to balance out the capital accounts the $25,000 was a transaction between the two INDIVIDUALS and does not affect the PARTNESHIP in any way.
That is true. Thank you for your help!
Thank you.
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