Schedule K-1 Box J- Beginning and Ending Capital %

Forum|Forum|2 years ago
January 30, 2024
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Hello All,

I created an LLC with my partner contributing $9,900 for 99% share and I contributed $100 for 1% share. So my understand that the beginning % capital would be 99% and 1% respectively in Box K of Schedule K-1.

My partner and I took different cash distributions from the company. With all the income and distributions, my partners capital account balance is $5000 where as mine is $200.

So should the ending Capital % in Box J be updated to $96% and 4% respectively OR would it remain 99% and 1% as per profit share agreement?

Thank you in advance for all you help.

RobertB4444

The ownership percentages are set up by an agreement between the partners. Once you enter the ownership percentages they don't change unless the partners agree to a change.

The contributed capital adds to the basis of each partner. So you would enter each partners contributions separately under their name. Distributions are the same way. If you just enter the distributions as a lump sum then the system will separate them based on ownership percentages so you will need to manually adjust each partner's distributions to reflect what was actually received. Distributions reduce the partner's basis in the partnership, but not their percentage of ownership.

@vshah20

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