The response helps, but still difficult in a forum such as this, but here goes:
- Take a look at the link provided by @tagteam for what happens when you go from a multi-member LLC to a single member LLC (disregarded entity). You are situation 1 in that revenue procedure. Don't get hung up on the semantics of "selling" as effectively that is what is happening in a divorce / separation.
- Honestly I would not recommend amending the 2019 form 1065 JUST to change it to a final return. Given that we are now in July of 2021, I just think there is too much time in between and only opens the door for IRS scrutiny. See bullet 4.
- Given that this appears to be a small entity and the spouse only has 5%, I would strongly recommend that you just make the 2020 form 1065 as the final return; clean, minimal K-1 activity to the spouse and you are now done.
- There are most likely forms that need to be completed for the state of Florida Secretary of State. Attempting to say 2019 is final could also be problematic for the state. Don't forget this step in the termination of the LLC. Do this step first to see how Florida reacts to the termination effective 12/31/2020. This will dictate whether 2020 can be the final partnership return for Florida.
*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.
