Partnership & LLC Taxation — explore related guides and services.
Partnership & Multi-Member LLC Tax Preparation
Partnership and multi-member LLC returns require careful treatment of allocations, capital accounts, partner basis, debt, distributions, and Schedule K-1 reporting.
Common Issues
- tax-basis capital accounts;
- outside basis and debt allocations;
- special allocations;
- guaranteed payments;
- property contributions and distributions;
- partner changes;
- Section 754 elections;
- Colorado reporting; and
- nonresident partners.
Who This Service Is For
This service addresses partnerships and LLCs treated as partnerships, including businesses with changing ownership, contributed property or uneven distributions. The entity’s tax classification should be established at the start of the engagement.
Records to Gather
Provide the operating or partnership agreement, prior Forms 1065 and Schedules K-1, financial statements, partner contribution and distribution records, loan documents and ownership-change agreements. Explain any differences between the books and prior return balances. Records for each partner are especially useful when ownership or financing changed during the year.
Coordinate Entity and Partner Reporting
The partnership return and the partners’ individual reporting should be considered together. Identify missing prior filings, notices and transactions that need additional review before preparation begins. For broader entity questions, see business transactions and entity classification.
When a Partner Leaves
An ownership change can affect basis, liabilities, allocations, and final reporting. Review tax consequences of abandoning a partnership or LLC interest, outside basis versus K-1 capital, and the final K-1 reporting checklist before coordinating the entity and owner returns.
A fund or management-company ownership change also calls for coordination of section 751 calculations, installment reporting, and applicable transfer disclosures. See hedge fund partner buyouts: tax consequences and reporting.
Family investment partnerships using a related management company should coordinate allocations and reporting with family office tax planning. The investor’s expenses and the manager’s business costs require separate treatment.
Related Partnership Tax Resources
Partnership return preparation involves outside basis, liabilities, Colorado reporting, entity classification, and filing deadlines.
Discuss Your Tax Preparation and Planning Needs
Work with a Colorado attorney and CPA for coordinated business, individual, rental, and planning services.