dhdobbin
Level 1

George4Tacks - There was no buyer. it was a separation and assignment of membership interest agreement. The recitals of the agreement are: 

1. Assignment. Assignor hereby sells and assigns the Membership Interest to
Company including all of Assignor’s rights and interest in and to Company.
2. Purchase Price. Company shall pay Assignor Five Thousand Dollars
($5,000.00) in good funds and shall deliver to Assignor a copy of Company’s new customer
list including all new customers from January 6, 2022, through May 15, 2022
(the “Customer List”). Both Assignor and Company shall have the right to use and
individually update the Customer List without royalty.

I agree with your post, however because the assignee is the "Company".  I don't think it is possible to generate an extra K-1 for the year, since there are no new members.

The final tax return shows other increases / decreases in all K1's with corresponding M2 adjustments. Which ended up as an M2 wash, elimination of the Assignors capital account, and an increase in the remaining members capital accounts. 

Now the question is whether that was correct, and if the remaining members just need to keep track of their outside basis and record long term capital gains as necessary when their outside basis goes negative due to the assignment of the former members undistributed earnings.

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