Transfer of ownership from partnership to sole proprietorship

[encaptureproductions]

Hi, last February me and my then partner created a multi-member LLC for our content production and social media management business that has the tax structure of a partnership. We had minimal expenses, but did generate income feb-april. As of June 2024, my partner stepped out of the company and agreed to give me full ownership. I have tried to get clarity on official things I need to do to change the structure, but am a bit confused. From one I have researched, I need to file a form 1065 for the period of Feb-Jun 2024 when we were officially partners as well as schedule k-1s for each of us. From there, I can file a new EIN for the sole proprietorship. Is this correct/ all that is neccesary?

Additionally, after the partner had stepped out and it was agreed I was the sole owner, I did generate income from July-August 2024. How do I make sure my total earning for 2024 aren't double taxed and properly reflected.

[Vanessa A]

You are correct on how to file. When you file the 1065 which will generate the K-1, you will only be reporting the income (and expenses) from February through June on that 1065 and only your portion of that income from February through June will be on your K-1.  Then the rest of the income and expenses from July and August will be reported on Schedule C.  Since you will be reporting the income from the separate periods separately, you will not be double taxed, as each period will only be reported one time on your return.

TurboTax BUSINESS will cover the 1065 and the K-1.  You could then use TurboTax Home and Business desktop version or TurboTax Online Premium to do the schedule C and also enter the K-1 from the partnership on your return.  These will be entered in separate places in your return.  Do not add the K-1 in the business section.  

As a sole proprietorship, you do not need an EIN, even if you are still a LLC unless you choose to be taxed as a corporation or have employees.  A sole proprietor uses their social security number to file their taxes.