- Mark as New
- Bookmark
- Subscribe
- Subscribe to RSS Feed
- Permalink
- Report Inappropriate Content
Business & farm
You don't need to terminate a partnership when the ownership changes. Simply report in TurboTax Business that you had an ownership change under Business Info >> About your Business (last question).
When you go to Partner/Member Information, edit each existing partner to adjust their capital accounts for the change. Then add the two new members. Continue at the bottom of the Member Summary page, confirm the date of the change, then enter the percentages before and after that date.
If you added two members, regardless of their marital status, you would prepare Schedule K-1 for each member. This is especially true because you redistributed the capital accounts to the new members.
You may need to make special allocations to be sure the activity is allocated correctly and to adjust the capital accounts. This is done in Forms Mode on the Schedule K-1 Worksheet. To do this, first check the box for "Has special allocations" under About Your Business. Then look for "How to Enter Special Allocations" demo after you enter the new percentages.
This is a complex and tedious process, and you may consider upgrading to TurboTax Live. This online service provides step-by-step guidance from a tax expert whenever you need assistance, either over the phone or by screensharing. You may find the time savings is worth the additional cost.
**Mark the post that answers your question by clicking on "Mark as Best Answer"