Transferring LLC interest to Livng trust and K1s

Forum|Forum|1 year ago
March 27, 2025
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Husband and wife were partners of LLC. They transfer their interest to their living trust (which uses husband SSN as it's Id). So trust becomes the new partner. Need help on the following questions:

1. does LLC issue K1s to all three (husband, wife, and trust)

2. if K1 are issued and husband and wife are they marked as final?

They have been and will file joint personal return. and they have carry-over losses recorded under two activities (one for husband and one for wife)

3. if they New K1s are marked as final, are properties considered disposed considered and the previous losses are unlocked? (does not seem right)

4. can they combine all activities on schedule SEinto one activity (husbands/trust's ID) and carry -over the losses in one line?

Thank you for your guidance

Best answer by RobertB4444

Since the trust is using the husband's social security number then there is no need to issue two K1's for him. You can just transfer the wife's interest to him. Mark the wife's K1 as final but do not convey any of the suspended losses to her. Then the activity will all be under husband's social and can be combined on one line.

@vidi