1065 Partnership return

Forum|Forum|6 years ago
July 14, 2020
5 replies
33 views

I am amending a partnership 1065 return as final for 2018. The equipment was salvaged in May 2019. The software says the date is unacceptable when running error check. Any assistance is greatly appreciated.

Thanks!

Rory

TurboTax Business Windows

Rick19744

Level 13

Some additional facts would be good:

You indicate equipment was salvaged in May 2019. Please expand on this.
What is the year end of the partnership? Calendar?
If bullet 2 is correct, what activity occurred between 1/1/2019 and 5/2019?
Anything distributed to the partners? What and when?

*A reminder that posts in a forum such as this do not constitute tax advice.Also keep in mind the date of replies, as tax law changes.

TCRCFOAuthor

Level 2

The equipment was taken to a salvage yard.

Calendar year 12/31.

The operations actually ended in December 2018. There was no activity after that.

The only distribution to the partners was the available cash in December 2018.

Thanks again!

Carl

Level 11

The equipment was salvaged in May 2019.

If that's what you're going to report, then you can't have a "final" 1065 for 2018. You'd have to report that on the "final" 1065 for tax year 2019.

The partnership is not disolved until all of the following are true.

- The end of year inventory balance is ZERO

- All capital contributions of all partners has been disposed of by the partnership - usually by either selling it or returning it to the contributing partner.

- All vehicles used in the partnership (even if less than 100% business use) have been removed from the partnership. Usually by returning it to the contributing member or converting it to the "personal use" of the contributing member, or showing some other type of disposition of the vehicle so that it is no longer in the partnership.

- All balance sheets are balanced at ZERO. This includes all bank accounts of the partnership too.

- The end of year inventory balance is ZERO.

All the above must be true in 2018, before the IRS will consider the partnership dissolved in 2018.

TCRCFOAuthor

Level 2

Thank you, Carl. That makes perfect sense. I was attempting to simplify the situation a little too much since they didn't operate at all in 2019. But the dissolution didn't really occur until 2019 since the assets were still in place. I'm guessing there was a balance in their cash account also. I really appreciate your assistance.

Rory