How do I change percentages for husband/wife partnership?

[ceh17]

I have a partnership LLC with my husband in the state of Virginia with a 51%/49% split.  His earnings/contributions have become minimal, so I want to change the percentages to reflect this on our taxes.  I would like to do this effective January 1, 2020.  What do I have to do to make it official with the IRS?  And how do I make the change in Turbo Tax (I experimented with it on my 2019 taxes and couldn't figure it out.)

[tagteam · Accepted solution]

You do not have to do anything to make it official with the IRS other than enter the appropriate percentages of ownership for each member of the LLC. However, the partnership agreement (LLC operating agreement) must specifically allow for any change.

If you are making a change during the tax year, then so indicate by changing the default "No" to "Yes" in the section of TurboTax Business depicted in the screenshot below.

If you are starting a return for a new tax year, then the program will prompt you to enter any changes after you transfer in the previous year's return.

[ceh17]

Thank you!

[BethMcNabb]

We updated our agreement on 1/1/20 from 99% and 1% to 49% and 51%. I clicked the box you indicated to update our information in TurboTax under the Ownership section and there was no place to indicate a percentage change. Am I missing something? Please help.  Do I need to do a new initial partnership return? If so, how do I do that with this other one mostly complete?

Thanks for your help.

[tagteam]

@BethMcNabb You need to edit your percentages (Partner/Member Information).

[BethMcNabb]

It did not allow me to do it there. Had to wait until I could get into the K1 forms and adjust the percentages there. Thank you. Maybe next year it will be there... Thanks!

[BeckyJ_94043]

Hello, I have a similar issue.  I have entered the new Percentage Interest for each LLC Partner in TurboTax for Business (Windows) 2022 for myself and my husband, but the program is not carrying the new percentages through to the K-1s.