Hi,
Our LLC has 4 equal shareholders. As of 12/31/2024, two sold their shares to the remaining shareholders. How is this reflected in Schedule K-1 Part III Section J?
I read on the Partnership FAQ on www.irs.gov that a change of partnership interest of 50% or more within a 12 month period is known as a Type B termination or technical termination. It notes that a "final" return should be filed for the period prior to the change in partnership with the "Technical Termination" and "final" checkboxes marked - I cannot find where the "Technical Termination" checkbox is.
It also says a second return should be filed to reflect the "initial" return of the new partners' interests and should have the "Technical Termination" and "initial" checkboxes marked. How does this work if the transfer of partnership interest occurred 12/31/2024? Again, can't find the "Technical Termination" checkbox.
Lastly, does the exiting partners report their gain/loss on investment on Schedule K-1 Part III Item 20 as AB amount or else where on their personal tax return like Schedule D or something?
