Multi Member LLC & Divorce

Forum|Forum|6 years ago
February 12, 2020
1 reply
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I was divorced in November of this year and we have an LLC with 5 members, I was awarded the business and his % of the business. Does he get a K-1 pro-rated with his % of ownership until the divorce or can I just take his percentage for the entire year and he doesn't get a K-1 or any %?

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Carl

Level 11

That's more of a legal question that you would need to ask the legal authority that dealt with the divorce. But the bottom line is, if you get a K-1 then you'll have to report it on your own tax return.

I would expect the partnership to show the departure of one partner, and the arrival of a new partner. But that all depends on the conditions as specified in the legal documents of the divorce. But as a partner, what the parntership return shows is not your concern (unless you are the CFO of the parntership that prepares the 1065). Your only concern is reporting the K-1 on your personal tax return if you actually receive one. I would expect you to have received one by now though.

harpesdAuthor

Level 2

Thank you for your answer. The Divorce Decree just awards his share of the business to me and I am the one preparing the K-1's but it asks for beginning partnership % and ending but it pro-rates it to the date of the change so I'm assuming I have to give him a K-1 to report. The reason I ask is because it is a business loss to claim.