This will be input as a Change of Ownership. You can search for ownership change in the help center (F1) or pull it up under Show Topic List in TurboTax Business Desktop for assistance. To navigate:
- Step-by-Step
- Business Info
- Partner/Member Information
- Proceed through the partner interview screens until you get to the partner who withdrew this year; when prompted, check the box for "this partner left the business during the year". Any distribution(s) they received on redemption should also be recorded in their partner info.
- Checking this box will lead to a series of additional interview screens asking for details of the transfer, including the Date of Ownership Change; here, enter the date in September.
- The very next screen will ask about the change in profit and/or capital percentages before and after the ownership change in September; enter the before and after %'s. Now the prorated income will flow correctly to the K-1s.
For more guidance, see: IRS Pub. 541, Partnerships - Disposition of Partner’s Interest - Sale, Exchange, or Other Transfer
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