As noted by @Kat this area in general is new, and adding in the complexity of your facts is really beyond the scope of this forum.   Having said that, in general, I would say the income does not qualify.  In order to qualify, the income must be effectively connected income.  The sourcing rules for this are covered in Code Sections 861-865.  The general rule for personal services is based on where the services are performed.  Based on your current facts, that appears to be Mexico.  As a result, that would disqualify the income from qualifying for the Section 199A deduction.   I would also recommend that you consult with a foreign tax specialist depending on the $$ involved. ... View more

There is no difference between a change in partnership interest and taking on a new partner.  Either case causes a change in the ownership allocation.   Example: 2 partners 50/50 take on a new partner.  There is no longer a 50/50 ownership.  The allocation and ownership percentages have changed to what ever this new  3rd partner acquired.   In another example, you can have a 50/50 ownership with A and B.  If C buys out B, then you still have a 50/50 ownership, however, there has once again been a change in ownership and requires specific allocation as noted in my original reply. ... View more

NO.  I disagree with @Carl .   When there is a change in partnership ownership, the statute and regulations under Section 706 require that allocations are based on specific rules; an interim closing of the books or proration method.   There are rules regarding each of the allocation methods and the proration method can only be used if agreed to by all the partners.  These rules are designed to avoid shifting of tax allocations.   In your case, the partners need to determine how they want to allocation the earnings based on the outcome of each of the above methods. ... View more

As noted by @tagteam you need to make sure that the percentages are correct in the partner information section.   In addition, I certainly hope that you have retained tax advice in your allocation methodology and you have an operating agreement that supports this allocation.   Unless you have what the IRS regulations call "substantial economic effect" to support your allocation, if audited, the IRS will allocate based on a partner's interest in the partnership (known as PIP).   This is a very complicated area and understood by few, so as noted above, you need to have good tax advice on your allocation methodology.   ... View more

I am going to deviate somewhat from @HACKITOFF response. In general the information is accurate, however, filing fees would be considered an organizational cost.  These costs are "incident in the creation of the partnership". Direct from the regulations "..... The following are examples of organizational expenses within the meaning of section 709 and this section: Legal fees for services incident to the organization of the partnership, such as negotiation and preparation of a partnership agreement; accounting fees for services incident to the organization of the partnership; and filing fees...." Any fees you pay to have your operating agreement drafted would also be considered an organizational cost. Additionally, for a partnership or an LLC taxed as a partnership, organizational costs are known as Section 709 costs (Section 248 relates to corporations which an LLC is not a corporation). At the end of the day, both types of costs, start-up or organizational are handled the same way for tax purposes. ... View more

This will generally be reflected when there are special allocations.  But as noted by @tagteam you will need to go to the source to get an exact understanding. ... View more

Some comments:   Your facts don't mention how many partners are involved, but every partner in the partnership needs a K-1 to complete their personal tax return. As was mentioned by @HACKITOFF , if the 1065 was not filed, there are penalties assessed to the partnership for late filing and as you can see, the penalty amount can add up quickly. While there appears to be a change in ownership, the technical termination rules have been eliminated so there is no longer two short period tax return filings. I am assuming from the limited facts that you are the partner that was forced out.  You need to follow up on several items: Review the partnership agreement as to the impact on a partner separation Inquire as to when you will receive your K-1 which should be marked as final Depending on the dollars involved do you need to consult with an attorney.  This depends on the partnership agreement and whether or not you are receiving an accurate redemption payment You hopefully have maintained a basis schedule of your investment in the partnership.  This will determine your overall gain or loss on the investment.  However, this can only be determined once you receive your final K-1.  An estimate is technically not permissible. Should you correspond with the partnership regarding a final K-1 and you don't receive any response, you need to document your attempts and retain these documents.  If you don't get any response from your attempts, then you may be able to claim your loss in 2019 (2019 tax filing).  But the key is you need to be able to provide documentation that you attempted to get the information, it was not provided, no response from the partnership and doubtful anything will change.  This information will help in supporting your claim for any loss on your investment. As noted by @HACKITOFF , depending on the $$ involved it may be in your best interest to consult with a tax professional. ... View more

  Can you expand on the type of entity the LLC is operating; single member LLC, multi-member LLC, LLC that has checked the box to be an association and classified as an S corporation?     ... View more