Question

Ownership % won't adjust on K-1's even with correct inputs

Forum|Forum|5 years ago
February 16, 2021
1 reply
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I had a partner leave (10% to 0%) and a new partner join (0% to 10%) on the same day. Listed former partner as his last year and the "final K-1" box is checked on his K-1, which is correct. However, it still shows his ending % as 10%. Also, the new partner shows a beginning percentage and ending percentage of 10%, which is also incorrect since we can't have 110%. (What I input below).

The only info I could find was about a glitch from the 2018 and 2019 versions, with the work around being to manually adjust the forms. (2) Solved: Re: In TurboTax Business it is not letting me edit... (intuit.com)

Is manually adjusting the K-1's the only solution? If so, it's disappointing this known glitch hasn't been fixed in well over 2 years. Any input is much appreciated.

TurboTax Business Windows

G

gloriah5200

You are asking a familiar question on K-1 presentation when a member terminates their interest.

See the following from the instructions of the schedule K-1:

If your interest terminated before the end of the partnership's tax year, the partnership will have entered, in the Ending column, the percentages that existed immediately before termination.
If your interest commenced after the beginning of the partnership's tax year, the partnership will have entered, in the Beginning column, the percentages that existed for you immediately after admission.

While the presentation may appear contrary to what we would think it should look like, the IRS wants a different presentation. The key is to make sure that the allocation in Part III is accurate.

For additional information, please refer to the following link:

Information on the partner % on the K-1