LLC partner 1 gifted interest to remaining partner which is a trust

Forum|Forum|1 year ago
February 1, 2025
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My LLC had 2 trusts as partners. The 90% trust gifted the interest to the remaining trust partner. Turbotax directs me to file a final k-1 then also submit an inital k-1 for this year. However, the remaining trust has a husband and wife a trustees. May we continue to operate as the same LLC partnership?

Do I need to file 2 k-1's for the remaining partner (a final and initial?).

TurboTax Business Windows

Mike9241

are the trusts grantor trusts?

A consequence of grantor trust status, as with multi-member LLCs, is any partnership interest owned by a grantor trust is treated as owned by the grantor (not the trustees). so if the remaining trust is a grantor trust and only one spouse is the grantor, there is no more partnership. Also, it seems that more than one year is involved.

if the remaining trust is not a grantor trust the same issue arises. There can not be a one partner partnership.