Father and son had 1%-99% partnership. Father dropped out. But son continued with the (hefty) business. He didn't change the PTR organization, and I had a lot of depreciation & info already entered on Form 1065. So to keep the software working, since the year was already over, I gave son two K-1s, for 99% and 1%. Should I force him to turn it into an S-corporation or Sch C in the future?
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Can you explain how the Father "Dropped out"?
Was there some kind of legal document transferring his ownership % to the son? (Gift, Sale, etc.) or just quit working in the business.
If so when was it dated. Unless the transfer happened in 2020, the Father would (Probably ) been a partner for a portion of 2021, and may need to receive a K-1 for his ownership percentage for the portion of the year he was an owner.
If there was a transfer, and it happened during 2021, the Partnership may have terminated on that date, and become a Proprietorship at that date.
If any on those happened, I am not sure the way you are planning to handle it would be correct.
Can you explain how the Father "Dropped out"?
Was there some kind of legal document transferring his ownership % to the son? (Gift, Sale, etc.) or just quit working in the business.
If so when was it dated. Unless the transfer happened in 2020, the Father would (Probably ) been a partner for a portion of 2021, and may need to receive a K-1 for his ownership percentage for the portion of the year he was an owner.
If there was a transfer, and it happened during 2021, the Partnership may have terminated on that date, and become a Proprietorship at that date.
If any on those happened, I am not sure the way you are planning to handle it would be correct.
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