Partnership interest exchange

[JoniIsner]

Individual Partner in partnership transfers their interest to a new LLC (partnership) that they have the same ownership percentage in.  Transfer is done March 20.  How would the K-1 look... K-1 to individual up to March 20 and K-1 from March 20 - Dec 31 for LLC (partnership)??

[sjrcpa]

Yes

[JoniIsner]

Next question... Partner A (50%) and Partner B (50%) own Old Partnership... Partner A transfers partnership interest to New A LLC which he owns 100% and Partner B transfers partnership interest to New B LLC which he own 100%.... is this a technical termination of the partnership?

[sjrcpa]

There is no such thing as a technical termination anymore.

Note the disclosure required on the K-1 when the partner is a SMLLC disregarded for tax purposes.

[JoniIsner]

Thanks. 

[sjrcpa]

You're welcome.

[JoniIsner]

One more question, does anything change if say you and your spouse are both 25% owners of original partnership and you assign your interest to a partnership (LLC) that you and your spouse own 50/50?

[sjrcpa]

Unless this is community property, they now have to file a 1065 for the new LLC.

[JoniIsner]

Thanks so much. Good Luck during tax season.