Entering change in ownership dates for a partnership return in Lacerte

To enter change in ownership dates to calculate a weighted average:

1. Open Screen 9.1, Change in Ownership.
2. If the changes to dates of ownership are the same for all partners, select Alloc Override Dates in the left menu.
3. Enter the Beginning date and Ending date for each change in the periods available. These dates must cover the entire tax year. The periods are distinct segments of time during which the percentages for everyone were constant.  Periods can be as long as several months, or as short as a day.
   • If you had one day that the partners' percentages changed (maybe when someone left), you would have two periods—the time before one partner left, and the time after the partner left.
   • For example, if you have three partners and one change during the year, you'd enter two periods: Period 1: 1/1/2020 - 5/15/2020 and Period 2: 05/16/2020 - 12/31/2020.
4. Select the Partner who changed or ended profit and loss sharing during the tax year.
   • For example, if partner 2 went from 50% ownership to 25% ownership, then partner 3 becomes a new partner at 25%.
5. If dates weren't entered in Alloc Override Dates, enter the period Beginning date and Ending date. Otherwise, Lacerte will use the dates entered in step 2.
6. In Percentage (xx.xxxxxx) (-1=none) enter the partner's profit and loss sharing percentage for each allocation period in xx.xxxxxx format.
   • If the percentage is zero for any period, enter -1.
7. Repeat these steps for all partners who changed or ended profit and loss sharing during the tax year.
   • If there's no change in ownership for a particular partner, no entries are needed for that partner in this screen.
8. Review the Ownership Change worksheet in Forms > Worksheets and select the partner to view the worksheet. The weighted average calculation will only apply to the Profit and Loss Sharing Percentage.
   • Calculation of weighted-average will show columns A through F:
     A = Beginning date, B = Ending date, C = Percentage, D = # of Days in period, E = Total days, F = Weighted percentage (C*D/E)
   • Example: Partner 2: A = 1/1/2016, B = 5/15/2019, C = 50, D = 135, E = 365, F = 18.493151
   • Example: Partner 3:  A = 5/16/2016, B = 12/31/2016, C = 25, D = 230, E = 365, F = 15.753425

Screen 9 is designed to allow customers to "weight" the change. Normally, Lacerte uses the ending percentages in Screen 8 to allocate figures from the return to the partners. but in some partnerships where the beginning and ending percentages are different, Lacerte's method doesn't take into account when the percentages change.

For example, if a partner owned 0% at the beginning and 50% at the end, to allocate 50% of the income from the return might be wrong if they only owned 50% for one month at the end of the year. Screen 9 allows them to apply a "weight" between the beginning and ending figures so that the automatically allocated figures might be closer to what they expect by taking into account when those figures change. The ending percentages in Screen 9 should always match the ending figures in Screen 8 or they've entered their weights incorrectly.