LLCP - S-Corp Partner Dissolved and Distributed LLCP Units to S-Corp Shareholders

[Britania]

I have an LLCP whose majority owner is an S-Corp. That S-Corp owned approximately 72% of the LLCP. At the start of 2024 the S-Corp dissolved and distributed the LLCP member units it owned to its shareholders pro rata to their ownership in the S-Corp.

In substance, the ownership of the LLCP did not change. Previously, this may have qualified as a technical termination, but as I understand the regs now, the technical termination provision has been eliminated. As such, the only impact on the LLCP from a tax and filing perspective would be to report the exit of the S-Corp and the entry of the S-Corp shareholders on the appropriate date and to allocate profit and loss in accordance with those dates.

Am I interpreting that correctly. Am I missing anything?

Thanks,

Britania

[PatriciaV]

Yes, you are correct. The LLCP would report the change in ownership as of the date the shares were distributed to the S-Corps shareholders.