[nigercpa]

We just got a partnership client with 3 partners. Being a new business, the only partnership income is a loss from a company they invested and received a K1. They want to file the 1065 so they can each receive a K1 for their 1040 filings. Is there any special consideration we need to be aware of? Also, how do we do this, Will all 3 partners receive a k-1. Thanks!

Far - Passed 83
Aud - Passed 84
Bec - Passed 77
Reg- Passed 77

[Ndom1]

Yes. The 1065 for the partnership will generate a K-1 for each partner. Input the activity from the K-1 from the company they invested in. Make sure the ending capital on the investment K-1 matches the investment balance on the balance sheet. Pay attention if the investment K-1 has any specific state allocations to each partner.

[Adam]

IF they are under 250,000 in assets they don't have to file a balance sheet..regardless I would track basis and financials..but some clients wont want to pay for it.

Its a night mare if they don't.

That would be passive income anyways if its an investment loss which is not deductible anyways as PAL are only deductible against passive income.

[Author]

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