I and my wife bought 49% of my partner share in LLC partnership. Now we own 100% if the LLC, each 50%.

[shimon]

I and my wife bought 49% of my partner share in LLC partnership. Now we own 100% of the LLC, each 50%.

Do we need to file final tax return on 1065, with final K1 to each partner?

[shimon]

How can I use turbo tax to show on my friend final K1 that his ending capital account is reduced to 0? Also how to show on my K1 that my capital account increased by the purchase price?

[RichardG · Accepted solution]

A final return in this situation is only necessary if you are winding up the partnership.  The sale of a 49% interest in the partnership is not a "technical termination" of the partnership.  The LLC still has two owners, and unless you and your spouse live in a community property state, the LLC still exists as a partnership.  

[shimon]

How can I use turbo tax to show on my friend final K1 that his ending capital account is reduced to 0? Also how to show on my K1 that my capital account increased by the purchase price?