You need to go into the partner information section and update the ownership. By entering this along with the date it occurred, TT will perform the correct computation.
Make sure the former partner's K-1 is marked as final.
There are a number of issues that need to be addressed, so depending on the $$ involved you may want to consult with a tax professional:
- Are there any "hot assets" that need to be considered and that information provided to the former partner
- Did the new partner pay an amount in excess of book value in which case will the LLC make a Section 754 election to step up the basis of the assets
- If there is a step up election made, then you will need to make special allocations going forward
*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.
